Think of them as mortgages. You buy a bond for a fixed price. Businesses guarantee an annual, or semi annual, payment during the life of the bond and at the end the principal is repaid in return for the bond.
Bonds used to be conservative investments that offered a better return than C/D's and money mkts, but had some risk because they were offered by private businesses and are not insured. Ratings agencies would offer a rating on the bond. The higher the rating the less risk and lower the yield (interest).
see #334