A legal document that indicates the name of the issuer, the face value of the bond and such other data is called a long term bond payable.
There are many different types of bonds available to investors. Some of the more common forms are:
•Serial bonds. Bonds issued in groups that mature at different dates. For example, $5,000,000 of serial bonds, $500,000 of which mature each year from 5–14 years after they are issued.
•Sinking fund bonds. Bonds that require the issuer to set aside a pool of assets used only to repay the bonds at maturity. These bonds reduce the risk that the company will not have enough cash to repay the bonds at maturity.
•Convertible bonds. Bonds that can be exchanged for a fixed number of shares of the company's common stock. In most cases, it is the investor's decision to convert the bonds to stock, although certain types of convertible bonds allow the issuing company to determine if and when bonds are converted.
•Registered bonds. Bonds issued in the name of a specific owner. This is how most bonds are issued today. Having a registered bond allows the owner to automatically receive the interest payments when they are made.
•Bearer bonds. Bonds that require the bondholder, also called the bearer, to go to a bank or broker with the bond or coupons attached to the bond to receive the interest and principal payments. They are called bearer or coupon bonds because the person presenting the bond or coupon receives the interest and principal payments.
•Secured bonds. Bonds are secured when specific company assets are pledged to serve as collateral for the bondholders. If the company fails to make payments according to the bond terms, the owners of secured bonds may require the assets to be sold to generate cash for the payments.
•Debenture bonds. These unsecured bonds require the bondholders to rely on the good name and financial stability of the issuing company for repayment of principal and interest amounts. These bonds are usually riskier than secured bonds. A subordinated debenture bond means the bond is repaid after other unsecured debt, as noted in the bond agreement.