Question: Please explain the differences between these two forms of debt:
(1) $500,000 amortized five year loan with an annual interest rate of $5.0%, payments are made twice a year (every six months).
(2) $500,000 five year bond with an annual interest rate of 5.0%, coupon payments are made twice a year (every six months), maturing bond is due at the end of five years.
Your description should include payment schedules, the advantages and/or disadvantages of each debt to the issuer and the lender.