Resources ❯ Accounting Terms

Short Coupon

[short KOO-puhn]

What is the definition of Short Coupon?

A bond interest payment that covers a period less than the conventional six-month period.

Using Short Coupon in an Example

A short coupon typically occurs when a bond is issued mid-period and the first interest payment is due before the next regular payment date, resulting in a shorter payment period and a proportionally smaller interest payment.

Using Short Coupon in a sentence

The bond's first payment involved a short coupon because it was issued just three months before the scheduled semi-annual interest payment date.

Related Terms

Surviving Spouse

A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.

Swap

A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.

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