Bond FAQs What is a Bond? A bond is a certificate of debt that is sold by an institution, usually the government or a business, to investors to raise capital to finance activity. How does a Bond work? Bonds have three components: the principal, the coupon rate, and the maturity date, all of which are used to calculate a bond’s yield. What is a Bond in accounting? Bonds payable are considered liabilities, and they are often recorded as long term liabilities on the balance sheet (unless they are payable within one year; then they are recorded as current liabilities). What is a Bond yield? A bond’s yield is a measure of its return. The yield is calculated using the bond’s current market price (not its principal value) and its coupon rate. What are Treasury Bonds? Treasury bonds are debt vehicles issued by the US Treasury Department to raise capital for government spending. They are historically among the safest bonds available, being backed by the full authority of the issuing government. About the Author True Tamplin, BSc, CEPF® Facebook Linkedin Instagram Twitter Youtube True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists. True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.