chapter 16

chapter 16 - CHAPTER 16 16 DILUTIVE SECURITIES AND DILUTIVE...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 16-1 C H A P T E R C H A P T E R 16 16 DILUTIVE SECURITIES AND DILUTIVE SECURITIES AND EARNINGS PER SHARE EARNINGS PER SHARE Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 16-2 1. Describe the accounting for the issuance, conversion, and retirement of convertible securities. 2. Explain the accounting for convertible preferred stock. 3. Contrast the accounting for stock warrants and for stock warrants issued with other securities. 4. Describe the accounting for stock compensation plans under generally accepted accounting principles. 5. Discuss the controversy involving stock compensation plans. 6. Compute earnings per share in a simple capital structure. 7. Compute earnings per share in a complex capital structure. Learning Objectives Learning Objectives
Background image of page 2
Chapter 16-3 Should companies report these instruments as a liability or equity . Debt and Equity Debt and Equity Stock Options Stock Options Convertible Securities Convertible Securities Preferred Stock Preferred Stock
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 16-4 (at the holder’s option) Benefit of a Bond (guaranteed interest) Privilege of Exchanging it for Stock Bonds which can be converted into other corporate securities are called convertible bonds. + Accounting for Convertible Debt Accounting for Convertible Debt LO 1 Describe the accounting for the issuance, conversion, and retirement of convertible securities.
Background image of page 4
Chapter 16-5 Desire to raise equity capital without giving up more ownership control than necessary. Obtain common stock financing at cheaper rates. Two main reasons corporations issue convertibles: Accounting for Convertible Debt Accounting for Convertible Debt LO 1 Describe the accounting for the issuance, conversion, and retirement of convertible securities.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 16-6 At Time of Issuance Accounting for Convertible Debt Accounting for Convertible Debt LO 1 Describe the accounting for the issuance, conversion, and retirement of convertible securities. Convertible bonds recorded as straight debt issue, with any discount or premium amortized over the term of the debt.
Background image of page 6
Chapter 16-7 BE16-1 BE16-1 : KC Inc. issued $4,000,000 par value, 7% convertible bonds at 99 : KC Inc. issued $4,000,000 par value, 7% convertible bonds at 99 for cash. If the bonds had not included the conversion feature, they would for cash. If the bonds had not included the conversion feature, they would have sold for 95. have sold for 95. Cash 3,960,000 Bonds payable 4,000,000 Journal entry at date of issuance: Discount on bonds payable 40,000 ($4,000,000 x 99% = $3,960,000) Accounting for Convertible Debt Accounting for Convertible Debt LO 1 Describe the accounting for the issuance, conversion, and retirement of convertible securities.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 16-8 At Time of Conversion Accounting for Convertible Debt Accounting for Convertible Debt LO 1 Describe the accounting for the issuance, conversion, and retirement of convertible securities. Companies use the
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/04/2011 for the course ACC 630 taught by Professor Mcarthy during the Spring '09 term at St. John's.

Page1 / 71

chapter 16 - CHAPTER 16 16 DILUTIVE SECURITIES AND DILUTIVE...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online