Conceptual objectives:

1. Explain the types and payment patterns of notes.
2. Appendix 10A—Explain and compute the present value of an amount(s) to be paid at a future date(s).
3. Appendix 10C—Describe interest accrual when bond payment periods differ from accounting periods.
4. Appendix 10D—Describe accounting for leases and pensions.

Analytical objectives:

1. Compare bond financing with stock financing.
2. Assess debt features and their implications.
3. Compute the debt-to-equity ratio and explain its use.

Procedural objectives:

1. Prepare entries to record bond issuance and interest expense.
2. Compute and record amortization of bond discount.
3. Compute and record amortization of bond premium.
4. Record the retirement of bonds.
5. Prepare entries to account for notes.