Equipment bonds are those secured by the rolling stock of a railway, and are also known as car trust certificates. A gold bond is any form of bond, the terms of which specify that it shall be paid in gold. Registered bonds are those, the names of the owners of which must be registered on the books of the company. Ownership of a registered bond can be transferred only on the books of the company. =50. Bond Liability.= When bonds are issued by a corporation, either public or private, an account is opened under some such caption as _bond issue_ or _bonds payable_. As fast as bonds are sold the proceeds are credited to this account, which represents a liability. A new account should be opened for each issue of bonds. The bonds of a given issue will all bear the same date, with interest payable from that date. We will suppose that a corporation issues its bonds for $100,000.00 in denominations of $1,000.00 each. These bonds are dated Feb. 1st, and bear interest at 5 per cent payable annually. They are payable at the end of 10 years from date. The company agrees to maintain a sinking fund of an amount sufficient to pay the bonds at maturity if invested in securities drawing 4 per cent interest, and to invest the fund in such securities which are to be placed in the hands of a trustee. During the first year bonds are sold in the amounts and under the conditions which follow: _First._ On the date of issue $10,000.00 of these bonds are sold at par. _Second._ At the end of three months $10,000.00 of the bonds are sold at 101 and accrued interest, yielding $10,225.00 of which $10,000.00 is principal, $100.00 premium, and $125.00 interest. _Third._ The next sale is $10,000.00 of the bonds at 98, interest accrued $250.00, yielding $10,050.00 made up of principal $10,000.00, less discount $200.00, and interest $250.00. [Illustration: Ledger Accounts of a Bond Issue] =51. Premium on Bonds.= When bonds are sold at a price above par, the premium should be credited to a _premium on bonds_ account. When sold below par, the discount may be charged to the same account. =52. Interest on Bonds.= The interest paid on bonds may be charged to an _interest on bonds_ account, which keeps it separate from the regular interest account. When bonds are sold with accrued interest, which is paid by the purchaser, the accrued interest is credited to interest on bonds. =53. Expense of Bond Issue.= All expenses incurred in the issue and sale of bonds should be charged to _expense of bond issue_ account. The account can be closed into profit and loss immediately, or it is proper to spread it over the life of the bonds, charging off the proper amount each year. It is also considered proper to charge discount on bonds to this account.