At end of maturity dr bond payable proceeds

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Unformatted text preview: schedule! You only need to know the effective interest method (don’t worry about the straight- line method for bond amortization) Date Cash Interest Difference Carrying value payment expense Principal x Carrying value Difference Change in carrying stated rate x effective rate between cash value – either add or payment and subtract the difference interest expense depending on whether à༎ this will it is a discount or reduce the bond premium bond – this discount or bond will be the principal at premium the end of the bond account maturity VIII. Accounting for bonds a. At issue Dr: Cash (proceeds) Cr Bond payable (proceeds) b. Every period (could be quarterly, semi- annually, annually) Dr: Interest expense (see above) Dr/Cr: Bond discount/bond premium (BALANCING=DIFF) Cr: Cash (see above) c. At end of maturity Dr: Bond payable (proceeds) Cr: Cash (proceeds) IX. Early retirement of a bond (i.e., bond call) – journal entry Dr: Bond payable (principal) Dr/Cr: Bond discount/Bond premium (carrying value) Dr/Cr:Loss/Gain (DEBITS=CREDITS) Cr: Cash (how much was paid to retire the bond) Chapter 11 – Stockholders’ Equity I. Types of shares a. Authorized (=Issued +Unissued) - # shares firm can le...
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This document was uploaded on 02/09/2014.

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