Accounts: Their Construction and Interpretation for Business Men and Students of Affairs

By William Morse Cole | Go to book overview

CHAPTER FIFTEEN
ACCOUNTING IN REORGANIZATIONS

As good an illustration as we can find for the principles underlying the application of accounts to reorganizations is afforded by the two reorganizations of the Atchison, Topeka & Santa Fé Railroad mentioned in the last chapter. It is desirable to get as a preliminary to a study of them a view of the commoner kinds of bonded indebtedness.

The most common form of such indebtedness is the mortgage bond, which provides by way of security that on failure of the borrowing corporation to meet its indebtedness the lender may seize the property. A general mortgage bond will include a right to seize practically the whole property of the corporation, but special terms may provide that only specific named property shall be subject to the mortgage. When the funds raised under a mortgage have been exhausted and it becomes necessary to raise more, it may be possible to issue second-mortgage bonds upon the same property. These give a claim upon the property enforcible only after the claims of all holders of first-mortgage bonds have been satisfied. Such bonds, then, are likely to meet with a sale only when the first mortgage is in amount considerably below the recognized value of the property. In some cases even a third mortgage may be issued, its value being practically nothing unless the claims of the first two sets of mortgages are more than covered.

An income bond, unlike the mortgage bond, gives no security in the property of the corporation. It is a claim upon the corporation's income only. If income is not earned, the holder of the bond has no recourse. If it is provided in the terms of the bond that the claim to income shall be cumulative, defaulted interest in bad years must be made up from the earnings, when large enough, in the subsequent year or years; and, of course, payment for interest on income bonds must be made before any dividend can be paid, but

-191-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited page

Bookmark this page
Accounts: Their Construction and Interpretation for Business Men and Students of Affairs
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this book
  • Bookmarks
  • Highlights & Notes
  • Citations
/ 346

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.