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ACC 291 Bonds - Premium or DiscountACC/291Bonds - Premium or DiscountBonds are a form of interest-bearing notes payable; obtaining large amounts of long-term capital (long term capital movements include FDI and movements of financial capital with maturity of more than one year, this includes equities) (Long term Capital, 2014). Upper management usually has to decide whether to issue common stock, equity financing or bonds (Accounting Coach, 2013). Issuing bonds is so they dont affect stockholder control. Do to the fact that bondholders do not have voting rights; business owners can raise capital with bonds and still maintain corporate control. Bonds are appealing to corporations because the cost of bond interest is tax-deductible. This tax break treatment may cause bonds to result in lower cost of capital than in equity financing. A possible disadvantage in using bonds is that the company must pay interest on a periodic basis; the business must also repay the principal at the due date. A business with fluctuating earnings and or a weak cash position may have great difficulty making interest payments when earnings are low. A business may also get long-te

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