Video: Notes Payable Versus Bonds Payable

In this lesson, Nick Palazzolo meticulously breaks down the intricacies of accounting for notes payable and bonds payable, focusing on their valuation at present value and the management of any resulting discounts or premiums. He demystifies the present value factors by teaching how to memorize and differentiate between present value of a single sum, ordinary annuity, and annuity due, emphasizing the practical application of time value of money concepts. With clear examples, he illustrates how present value affects the actual value of bonds and interest payments, and why the timing of payments (beginning versus end of the year) is crucial in calculating the correct amount. By the end of this session, the seemingly complex topic of bonds payable becomes accessible and understandable.