Accounting Dictionary

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Bond

Definition: A bond is a fixed obligation to pay, usually at a stated rate of $1,000 per bond, that is issued by a corporation to investors.  It may be a registered bond, under which a company maintains a list of owners of each bond.  The company then periodically sends interest payments, as well as the final principal payment, to the investor of record.  It may also be a coupon bond, for which the company does not maintain a standard list of bond holders.  Instead, each bond contains interest coupons that the bond holders send to the company on the dates when interest payments are due.  The coupon bond is more easily transferable between investors.