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Accounting for Bonds Issued at Par
 
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This video explains how to account for bonds issued at par in the context of financial accounting. An example is provided to illustrate the necessary journal entries. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 22048 Edspira
How to Amortize a Bond Discount
 
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This video explains how to account for bonds issued at a discount using the effective interest rate method for bond discount amortization. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 100988 Edspira
Bond Issuance Examples
 
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Roger Philipp, CPA, CGMA, presents a basic bond issue with a face value of $1 million, term of 5 years, and stated or coupon rate of 8% in the video 11.01 - Bond Issuance Examples. He also shows the journal entries for issuance and interest payments at market rates or effective rates of 8%, then 10%, and then 6%. If the bond is issued to yield 8%, then the bond is issued at par and interest expense will equal the interest payment. If the effective interest rate is 10% then the bond is issued at a discount. Now interest expense will no longer equal the cash coupon interest paid. Roger explains how to set up the journal entry, keeping things simple for now with straight-line amortization of the bond discount. Roger continues the problem by showing in the journal entry how the issuer’s interest expense will equal the market rate of 10%. Finally, Roger walks through the journal entries for this 8% face rate bond issued at a premium with a yield of 6%. As an advanced bonus, Roger has us consider the effects of the bond interest payments on the statement of cash flows. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Now, next page it says issuance of bonds example and we're going to go through this example. Face value of the bonds, million dollars. Term, five year versus what? Term versus serial bond which matures in installments. Stated interest rate 8%. That's how much cash I'm going to get. I'm going to get 8% of a million dollars or $80,000 in cash but what am I earning? That's a different question. Then it says effective or market or yield is eight in example A, ten in example B, six in example C. Notice that we're going to be doing three examples. One is going to be eight, eight which is issued at par, issued at face. We don't have to worry about the discounted premium then we'll go to a discount example, then we'll go to a premium example and then life will be beautiful for you, things will make sense.
Views: 25669 Roger CPA Review
Discounts, Premiums and Bonds at Par (Intermediate Financial Accounting Tutorial #12)
 
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Before we moved onto valuing and reporting long term bonds I thought that I would provide a quick summary of bonds issued at a discount, premium or at par. The stated rate is also known as the coupon rate, or face rate. The market rate is also known as the effective rate and is the rate at which you can get other very similar or identical financial instruments (for example, a bond may have been issued at a 4% coupon rate, 1 year later the market rate for those bonds might have shifted to 6%). Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: https://twitter.com/notepirate We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites! ** Notepirate is privately owned and exclusive to Notepirate.com.**
Views: 31098 Notepirate
Amortizing a Bond Premium
 
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This video explains how to account for bonds issued at a premium. An example is provided to illustrate how to calculate the bond proceeds, premium, interest expense, amortization of the bond premium, and the carrying value of the bonds. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 61945 Edspira
Issuance of Bonds Journal Entry - Lesson 1
 
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In the video, 11.03 - Issuance of Bonds Journal Entry – Lesson 1, Roger Philipp, CPA, CGMA, provides a conceptual overview of everything that could be involved in a bond issuance journal entry, from the issuer’s point of view, step-by-step. - Step 1: Credit bonds that are payable for the face amount of the bonds. - Step 2: Credit any Accrued Interest Payable – the bond may have been accruing interest for some months before issuance. If there is accrued interest payable, it must be added to Cash in the next step. - Step 3: Debit Cash for any accrued interest payable plus either the present value of the lump sum and the annuity, as covered in previous lessons, OR for the issuance face percentage give in the problem, e.g. 101 or 98. Also for Step 3, bond issue costs or BIC are subtracted from Cash. - Step 4: Bond issue costs which are debited separately and which will be amortized straight-line over the period the bonds are outstanding. - Step 5: Add the plug – if a debit plug is needed, it’s a discount; if a credit plug is needed, it’s a premium. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Okay, now hopefully bonds are starting to make a little bit of sense, but let's continue on. You'll see here, journal entry at issuance, and we're talking about BIC and accrued interest. So what I'm going to do, is I'm going to give you pretty much anything and everything they ever test you on. They don't usually test this much of it, but I'm going to give it all to you, just so we're having a good time. Now, as we got through this, there are certain things that fall into our journal entry. And here's what we're going to look at. And I'm going to make it like a one, two, three, four, and then we'll go through the details. So here's what our journal entry will basically look like, we'll have a one, two, three, four, five or five. Hmm, very interesting.
Views: 20202 Roger CPA Review
Bonds
 
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This video discusses advantages and disadvantages of bonds compared to stock. It also describes issuing at par, at a discount and at a premium. Finally it discusses the contract rate ( also known as coupon, stated, or nominal rate) vs the market rate.
Views: 5966 mattfisher64
Bond Issue at Par | Valuation of Bonds Payable | Intermediate Accounting | CPA Exam FAR | Chp 14 p 2
 
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Bond valuation, bond interest expense, par value, amortization, straight line method, effective interest rate method, bond discount, bond premium, carrying value of bond, premium, discount, bond issue between interest dates, CPA exam
Bonds Effective Interest Method - Discount
 
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This video explains how to calculate a bond that sells at a discount. It shows the corresponding journal entries on the original sale and interest payments. It also shows how to prepare the amortization table and explains what the numbers represent.
Views: 25448 mattfisher64
Bonds Straight Line Amortization
 
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This video shows how we use the straight line amortization method to record interest expense for both a discount and a premium.
Views: 28035 mattfisher64
Accounting Basics 8.1: Accounting for Bonds - Discounts
 
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Link to question from video: http://bit.ly/1mFdPP6 Link to table from video: http://bit.ly/1ijpJsC This video shows the basics of bonds and using the effective interest method to deal with bonds issued at a discount. Here is a online class accounting with a serial 40 online accounting lessons for you. With my accounting classes, you must not go to schools in accounting to training for accountant. Subscribe for more lessions, all free :) Go to: http://www.accountingworkbook.com/ to download the problems.
Views: 5386 Online Courses
Introduction to bonds | Stocks and bonds | Finance & Capital Markets | Khan Academy
 
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What it means to buy a bond. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/corporate-debt-versus-traditional-mortgages?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 503396 Khan Academy
Bonds | Intermediate Accounting | CPA Exam FAR | Chp 14 p 1
 
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Long-term debt consists of probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer. Bonds payable, long-term notes payable, mortgages payable, pension liabilities, and lease liabilities are examples of long-term liabilities. A corporation, per its bylaws, usually requires approval by the board of directors and the stockholders before bonds or notes can be issued. The same holds true for other types of long-term debt arrangements. Generally, long-term debt has various covenants or restrictions that protect both lenders and borrowers. The indenture or agreement often includes the amounts authorized to be issued, interest rate, due date(s), call provisions, property pledged as security, sinking fund requirements, working capital and dividend restrictions, and limitations concerning the assumption of additional debt. Companies should describe these features in the body of the financial statements or the notes if important for a complete understanding of the financial position and the results of operations.
Stock Warrants Detachable Issued With Bonds Residual (Incremental) Method Accounting
 
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Bonds issued with detachable stock warrants (warrants attached to bonds as debt security, debt for equity swap), stock warrant gives the holder of the warrant the opportunity to buy a specified number of shares of common stock at a specified price, detachable stock warrants can be sold separate from the bond, at time of issuance example will use the residual (incremental) valuation method to allocate the difference between debt and equity portion of the bond (debt security), equity portion is assigned to the value of the stock warrant if its sold separately from the bond and the debt portion is what the bond is worth separate from the warrant, a detachable stock warrant does not affect liability at time of excercise, complete accounting example for detachable warrants with detailed calculations including accounting journal entries shown on balance sheet template (T accounts) by Allen Mursau
Views: 1259 Allen Mursau
Bond Amortization Using Straight Line Method (Issued At  Discount) Accounting & J/E's
 
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How to amortize a bond issued (purchased) at a discount (present value less than face value of bond) using straight line amortization method (straight line amortization schedule), bond has two cash flows, (1) face value or principal amount paid at maturity and (2) interest payment (usually semi annual) based on the stated rate of interest on the bond, example shown as a cash flow diagram, present value (PV) what its worth when issued (issue date) based on discounting bonds cash flows (maturity value + interest payments) back to issue date using the market rate of interest, comparing the bonds present value to its future value (face value) determines the discount amount on the bond (amount the PV is less than its FV), the discount amount has to be amortized over the life of the bond using the straight line amortization schedule (discount amont divided by number of periods), detailed example showing how to setup amortization schedule and use the schedule to amortize the bond discount, detailed calculations for bond payable, discount on bond payable, interest payments, interest expense (market rate x carrying value of bond), amortized interest expense (interest payment - interest expense), add amortized discount to the bonds carrying value to determine the bonds new carrying value (bond amortization), detailed step by step calculations and use for accounting by Allen Mursau
Views: 11935 Allen Mursau
Accounting Unit 8 - Part 1 - Accounting for Bonds - Discounts
 
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Links to files stopped working on these old videos. Check out my new playlist (with working links) here: https://youtu.be/mIC2cvX7JYE This video shows the basics of bonds and using the effective interest method to deal with bonds issued at a discount. This video and the attached worksheet were prepared by Tony Bell of Thompson Rivers University (TRU) - I encourage educators to freely use, edit and modify these videos and the attached worksheet - they are available under Creative Commons Licenses.
Views: 10627 Tony Bell
Video 1 - Bonds Issued Between Interest Payment Dates
 
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This video provides two examples of this concept
Views: 688 Course Videos
Accounting for bonds issued at par value
 
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A discussion on the accounting for bonds issued at par value. Covers issuance to bond pay-off.
Views: 265 Lynnette Yerbury
Explanation: Bond Discounts
 
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This video will help you understand why companies issue bonds at a discount. We will not go over any calculations in this video.
Views: 2156 Accounting Videos
Accounting: Bonds (Part I)
 
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Copyright by Brian R. Lazarus. Check out this website: http://www.lazarusbusinesssolutions.com for other related video lectures.
Views: 35922 profblazarus
Bond Issue at Discount and Premium(Straight Line) | Intermediate Accounting | CPA Exam FAR |Chp14 p3
 
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Bond valuation, bond interest expense, par value, amortization, straight line method, effective interest rate method, bond discount, bond premium, carrying value of bond, premium, discount, bond issue between interest dates, CPA exam
Accounting for bonds issued at a premium
 
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Demonstration of accounting for bonds issued at a premium using both the straight line and the effective interest methods of amorization.
Views: 53 Lynnette Yerbury
Stock Warrants Detachable Vs Nondetachable Issued With Bonds Detailed Accounting
 
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Comparison between detachable and nondetachable stock warrants (warrants attached to bonds as debt security, debt for equity swap), stock warrant gives the holder of the warrant the opportunity to buy a specified number of shares of common stock at a specified price, detachable stock warrants can be sold separate from the bond, at time of issuance can use either the residual method or proportional method to allocate the difference between debt and equity portion of the bond (debt security), equity portion is assigned to the value of the stock warrant if its sold separately from the bond and the debt portion is what the bond is worth separate from the warrant, nondetachable stock warrants can not be sold separately from the bond, the liability, the equity portion can not be separated out, total amount is assigned to liability, includes price of bond and warrant, at exercise of warrant the nondetachable warrant reduces liability (transferred to equity) while a detachable stock warrant does not affect liability at time of excercise, complete accounting example for both detachable and nondetachable warrants with detailed calculations including accounting journal entries shown on balance sheet template (T accounts) by Allen Mursau
Views: 1743 Allen Mursau
Accounting 2 - ACCT 122 - Program #215 - Issuing Bonds at a Premium
 
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Accounting 2 - ACCT 122 - Program #215 - Issuing Bonds at a Premium
Views: 8950 JCCCvideo
Accounting 2 - ACCT 122 - Program #214 - Issuing Bonds at a Discount
 
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Accounting 2 - ACCT 122 - Program #214 - Issuing Bonds at a Discount
Views: 14030 JCCCvideo
Bond Retirement (Reacquistion Price, Unamortized Discount & Issue Cost, Gain Or Loss)
 
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Accounting for a bond retired before maturity, reacquisition price is the amount paid to extingish the debt, any excess of the net carrying value amount over the reacquisition price is a gain from extinguishment, the excess of the acquistion price over the net carrying amount is a loss from extinguishment, the unamortized premium or discount, and any costs of issue applicable to the bonds must be amortized up to the reaquisition date, the example detailed is Corp-A issued $3 mil of 10%, 10-year bonds on (1/1/20X1), at 97 (97% of par or face value), interest is payable semi-annually on (1/1) and (7/1), Legal & other costs incurred of $50,000, Corp-A uses the Effective Interest Method of amortization for bond premium or discount and any deferred charges for bond issue costs, the bonds are callable at 101 (101% of face amt.) and on (1/1/2015), Corp-A called $2 mil face amount of the bonds and retired them, detailed accounting by Allen Mursau
Views: 10291 Allen Mursau
Governmental Accounting (Serial Bonds Issued, Debt Service Fund & General LT-Debt Group)
 
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Governmental Accounting for Special Assessment As Serial Bond, Payments made to Debt Service Fund & Recording General LT-Debt Account Group, Example: City is to construct a new roadway financed thru a special assessment to property owners (Issue a Special Assessment Serial Bond) (Levy Special Assessment to pay Serial Bond), (A) Capital Projects Fund (Accts. for Resources used in construction), (B) Debt Service Fund: Property Owners make payments to DSF & DSF makes pmts. Required by Serial Bonds, Governmental Accounting (Modified Accrual) Cannot accrue Revenue unless its (Available & Measureable), (C) General Long-Term Debt Acct. Group Accts. for Unmatured Principal of Obligation (Debt), detailed accounting by Allen Mursau
Views: 2420 Allen Mursau
Bonds & Notes Payable Introduction
 
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Bonds and notes payable will be forms of raising capital for a company. In other words a company that needs cash for operations can raise capital using different options. They may take a loan form the bank, issue stock, or issue bonds. each option has pros and cons. Issuing stock results in selling equity interest in the company but does not result in interest payments. Issuing bonds and notes result in interest expense. The interest expense is deductible. Loans or notes payable are often taken from a bank. Bonds could be used to issue to the public. For more accounting Information see website. http://accountinginstruction.info/courses/
Stock Warrants Non Detachable Issued With Bonds Accounting (Convertible Debt)
 
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Bonds issued with nondetachable stock warrants (warrants attached to bonds as debt security, debt for equity swap), stock warrant gives the holder of the warrant the opportunity to buy a specified number of shares of common stock at a specified price, nondetachable stock warrants can not be sold separate from the bond, at time of issuance can use either the residual method or proportional method to allocate the difference between debt and equity portion of the bond (debt security), equity portion is assigned to the value of the stock warrant if its sold separately from the bond and the debt portion is what the bond is worth separate from the warrant, nondetachable stock warrants can not be sold separately from the bond, the liability, the equity portion can not be separated out, total amount is assigned to liability, includes price of bond and warrant, at exercise of warrant the nondetachable warrant reduces liability (transferred to equity),complete accounting example for nondetachable warrants with detailed calculations including accounting journal entries shown on balance sheet template (T accounts) by Allen Mursau
Views: 2419 Allen Mursau
CONVERTIBLE BONDS EXPLAINED - TESLA CONVERTIBLE BOND EXAMPLE
 
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What is a convertible bond! A convertible bond is a debt instrument issued by a company in order to get financing. The company will pay a periodic interest rate on the borrowed amount and, like any other bond, the bond has a maturity date. But, unlike other bonds, the holder of the bond can choose between getting his money back or, converting his bonds for a pre-set number of shares in the company or common stocks. The decision depends on the value of the shares in that moment. If the market value of the shares is higher than the bond principal, it is better to convert. If the market value of the shares is lower, it is better to require the debt to be repaid. This video will discuss: What is a convertible bond - definition Why do companies issue convertible bonds - convertible bond advantages Why do investors buy convertible bonds Convertible bonds accounting What do you need to know as an investor in stocks that issue convertible bonds 3 convertible bond examples (Tesla convertible bond, Ctrip, 51Jobs) How do convertible bonds affect earnings (a bit of accounting) Convertible bonds conclusion What do I do? Full-time independent stock market analyst and researcher! STOCK MARKET RESEARCH PLATFORM (analysis, stocks to buy, model portfolio): https://sven-carlin-research-platform.teachable.com/p/stock-market-research-platform Check the comparative table on my Stock market research platform under curriculum preview! I am also a book author: Modern Value Investing book: https://amzn.to/2lvfH3t More at the Sven Carlin blog: https://svencarlin.com Stock market for modern value investors Facebook Group: https://www.facebook.com/groups/modernvalueinvesting/
Convertible Bonds (Interest & Amortization Expense, Issued Between Interest Payment Dates)
 
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Accounting for convertible bonds interest expense and amortization of discount when the bonds are issued after the stated date of the bond, the amortization is based on the remaining life of the bond after the issue date, interest expense has to be allocated based on the fact that the purchaser of the bonds have to pay the issuer any accrued interest betweeen the stated date & issue date, this interest is considered a payable for the issuer at the time the bonds are issued, the purchaser of the bonds are paid back the interest at the next interest payment date, interest expense on the income statement includes the interest paid & the amortization of the bond for the period, example Corp-A issued $6 mil of 10%, 10-year convertible bonds at 98 (98%) on (6/1/X1), dated( 4/1/X1), Interest Pmts (4/1 & 10/1), (Bonds issued 2 months after stated date of Bond), 1-On (4/1/X2) $2 mil bonds (33%) were converted into 30,000 shares of $20 par value Common Stock, 2-Bond Discount is amortized semi-annually, Straight Line For this example record the Interest Expense at the 1st interest payment date on (10/1/X1), detailed accounting by Allen Mursau
Views: 3041 Allen Mursau
Accounting for Bonds Payable (Straight-Line Amortization) Part 1
 
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Covers what is a bond, some bond terminology, and what it means for a bond to sell at par, a discount, or premium.
Views: 28501 ProfJakovich
Intro to Financial Accounting: Bonds Issued at Discount & Premium; Stockholder's Equity
 
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Introduction to Financial Accounting Professor Alexander Sannella Lecture 21 00:12 Review on Recording Bonds issued at discounts (verbal) 06:03 Recording Bonds Issued at a discount 06:58 Example 08:05 Recording Discounted bonds 17:52 Straight line - Amortization Table (discount) 19:36 Example 23:20 Recording Bonds Issued at a Premium 24:15 Example (verbal) 31:22 Journal Entry 34:25 Amortization Table (premium) example 36:05 Journal Entry Questions and Answers 39:46 Question 1 46:10 Question 2 52:07 Question 3 Learning Objective 4 56:06 Retirement of Bonds at Maturity + Journal Entry 56:56 Retirement before Maturity 59:36 Reasons for retiring bonds early 1:02:05 Example of retirement before maturity + Journal Entry Learning Objective 5 1:06:24 Balance Sheet Example Learning Objective 6 1:06:45 Debt Equity Ratio Chapter 13 Learning Objective 1 1:10:57 Stockholder's Equity (Definitions of Stock Terms) When the bond interest rate is greater than the market rate, the bonds are issued at a premium. The difference between the bonds payable and the cash received is recorded as a bond premium (an adjunct account). The premium is amoritzed over the life of the bond, reducing interest expense to the lower market rate. When the bond interest rate is less than the market rate, the bonds are issued at a discount. The difference between the bonds payable and the cash received is recorded as a bond discount (contra-liability). The discount is amortized over the life of the bond, increasing interest expense to the higher market rate. Bonds can be retired before maturity by an open market repurchase or a "call." Bonds can be called at par or a price above par (which is par plus a call premium). A company will retire bonds before maturity for a variety of reasons: (1) To refinance in order to take advantage of lower market interest rates, (2) the company has excess cash and would like to avoid future interest changes and create greater financial flexibility, (3) to improve the company's debt to equity ratio, and (4) to comply with other debt agreements. When retiring before maturity, the full bonds payable will typically be retired. The remaining discount or premium will be removed. The cash paid will not equal the face value. The difference will be recorded as either a gain on retirement of bonds (cash paid to retire is less than the carrying value) or a loss on retirement of bonds (cash paid to retire is more than the carrying value). A corporation is a separate entity created by law that is separate and distinct from its owners and its continued existence is dependent upon the corporate statutes of the state in which it is incorporated. Classification by ownership distinguishes between publicly held and privately held corporations. The primary objectives for accounting for stock holder's equity are to: (1) separately disclose each source of equity (due to widespread ownership and the owner-manager separation), and (2) to disclose all rights or any restrictions of rights of each class of equity security. The stockholders' equity section of the balance sheet includes several parenthetical disclosures: the terms are: authorized shares, issued shares, and outstanding shares. Authorized shares is the maximum number of shares of stock that a company can issue. It is specified in the company's charter. Issued shares are the total number of a company's shares that have been sold or distributed to shareholders over time. Outstanding shares are the number of shares of a corporation's stock that are in the hands of investors. Outstanding shares are issued shares less treasury shares. Treasury shares are the number of issued shares that have been previously issued and later reacquired by the corporation. To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Accounting Unit 8 - Part 2 - Accounting for Bonds - Premiums
 
21:15
Links to files stopped working on these old videos. Check out my new playlist (with working links) here: https://youtu.be/mIC2cvX7JYE This video shows the basics of bonds and using the effective interest method to deal with bonds issued at a premium. This video and the attached worksheet were prepared by Tony Bell of Thompson Rivers University (TRU) - I encourage educators to freely use, edit and modify these videos and the attached worksheet - they are available under Creative Commons Licenses.
Views: 4413 Tony Bell
Financial Accounting: LT Liabilities, Bonds Payable & Classification of Liabilities on Balance Sheet
 
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Introduction to Financial Accounting Long-Term Liabilities, Bonds Payable & Classification of Liabilities on the Balance Sheet (Chapter 11) April 15th, 2013 by Professor Victoria Chiu The Professor starts this lecture with a brief overview of the learning objectives of chapter 11 and then moves on to discuss long term notes payable (displaying the appropriate journal entries involved). The steps include recording the current portion of long-term notes payable, recording the previously accrued interest, and accruing the interest that hasn't been accrued from the previous year. The Professor also walks the class through a problem focused on accounting for a long-term note payable. Following this, the Professor moves on to the topic of mortgages payable. Mortgages are debts backed with a security interest in specific property (most commonly in houses). Unlike long-term notes payable, mortgages are secured with interest in property. If the mortgage covers a time period more than a year, then the part that is due with the current year should be classified as current while the remaining part remains long-term. To best keep track of mortgages, an amortization schedule is often used (for which a very detailed and labeled illustration is shown). An amortization schedule keeps track of how much of your payment consists of interest, and how much consists of principal. The Professor also shows the journal entries involved for mortgages (the mortgage payable account is introduced). After completing coverage of mortgages, the Professor moves on to discuss bonds payable. Bonds are a liability that the company issues to bondholders (lenders) in hopes of raising capital for the firm. Firms resort to bonds because they require tons of capital to finance their ambitious, often large-scale operations. Bondholders receive interest on a semi-annual basis. There are several types of bonds. Term bonds are bonds that mature on a specific date (this is the most basic and straightforward type). Serial bonds are those that "mature" in installments (part of the bonds would be due every single year rather than the entire bond being due in one go). Secured bonds are those that are backed up (or "secured") by assets (similar to how mortgages are backed by real property). Debentures are the opposite of secured bonds; they are not backed by any assets. The Professor then goes on to emphasize that the price an individual would purchase a bond for (known as the issue price) is not necessarily equivalent to the bond's face value. Bonds can be issued (or sold) at any price agreed by the issuer and bondholder. While selling the bonds at face value is obviously an option, bonds can also be sold at a discount (a price less than the face value) or at a premium (a price above the face value). The Professor also goes on to show how face value, premium, and discounted bonds are written. A bond sold at face value, for example, would be written as "100." A bond sold at a premium would be written as "102." A bond sold at a discount would be written as "95." These numbers can be thought of as percentages of the original face value. -----QUICK NAVIGATION----- Overview of Learning Objectives: 1:19 Long-term Notes Payable: 1:59 Long-term Notes Payable - Payments: 7:54 Long-term Notes Payable - T-Accounts: 16:04 Exercise S11-1 - Accounting for a Long-term Note Payable: 17:52 Exercise S11-1 Solution Review: 21:06 Mortgage Payable: 26:38 Amortization Schedule: 31:41 Mortgage Payable (Revisited): 42:06 Amortization Schedule (Revisited): 43:43 Bonds Payable: 47:23 Types of Bonds: 54:42 Bond Issuing Price: 57:16 Bond Interest Rates: 1:02:15 Bond Prices: 1:04:29 Exercise S11-3 Determining Bond Prices:1:05:56 Issuing Bonds Payable at Maturity (Par) Value: 1:07:52 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Views: 12557 Rutgers Accounting Web
Module 9 Video 3 - Bonds issued at a Premium - Problem 9-4A
 
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Go to: http://www.accountingworkbook.com/ to download the problems. Link to template: http://www.accountingworkbook.com/uploads/4/9/8/9/49896931/bond_effective_interest_table.xlsx Module 9 examines bonds and liabilities. We learn how to account for bond discounts and premiums using the effective interest method.
Views: 5323 Tony Bell
Zero Coupon Bond Purchased At Discount Amortization (Bonds Receivable) Accounting
 
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Accounting for a zero coupon bond purchased at a discount (issue price less than face value) and recorded as bond receivable, interest calculation and balance sheet recording, start with a cash flow diagram, face (maturity) value, no stated rate of interest on bond and no interest payments (usually semi-annual), discount the face (maturity) value using the market rate of interest to the issue (purchase) date to determine its present value (purchase price) the difference between the face value (FV) and its present value (PV) equals the discounted amount which equals the profit or expense, the discounted amount has to be amortized to determine the interest receivable and interest revenue recognized, the amortization schedule is calculated as (market rate of interest x beginning carrying value = amortized interest, add to beginning carrying value to determine new carrying (book) value, detailed calculations with balance sheet journal entries for bond receivable, discount bond receivable, interest revenue etc., by Allen Mursau
Views: 1166 Allen Mursau
Convertible Bonds Using Market Value Method, Accounting Complete Calculations & J/E's
 
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Convertible bonds (debt for equity swap), accounting using the market value method to convert bonds into common stock, originally issued convertible bonds, bondholders are holding the bonds, exchange at least a portion of the bonds for common stock, bondholders return that portion back to the company in exchange for common stock, gain or loss is recognized on redemption of bonds (bond carrying value - market value of stock), complete calculations for accounting required for the bond exchange, premium (discount) versus bond carrying value, number bonds converted versus shares common stock issued (decreases liabilities while increasing equity), balance sheet journal entries (T accounts) shown on balance sheet template, bonds payable, bond premium (discount), common stock, APIC (additional paid in capital), accounting detailed and explained by Allen Mursau
Views: 2298 Allen Mursau
Bonds: Class Questions
 
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Test your knowledge of bonds with some CPA Exam-style questions! The first question deals with the characteristics of term bonds, serial bonds, debenture bonds and secured bonds. The second question concerns bond retirement, and the answer becomes obvious as Roger demonstrates the journal entry. Question 3 is a present value problem requiring the calculation of bond issue price. Roger also gives test-taking tips pertaining to each question. From this point moving forward, the Roger CPA Review course moves to more complex bonds such as convertible bonds and bonds with detachable warrants. Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Okay let's do some questions to help emphasize some of the exciting stuff we've learned in bonds so far. Question number one. It says what are the total amounts of serial bonds and debenture bonds? Oh what is a serial bond? Om nom nom nom nom. Every day installments. It is a bond that matures in installments. So that million dollars. Instead of getting it at the end of the term, I'm going to get 200, 200, 200, 200, 200,000 a year for five years is a million bucks. That's a serial bond, installments.
Views: 5582 Roger CPA Review
Convertible Bonds Using Book Value Method, Accounting Complete Calculations & J/E's
 
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Convertible bonds (debt for equity swap), accounting using the book value method to convert bonds into common stock, originally issued convertible bonds, bondholders are holding the bonds, exchange at least a portion of the bonds for common stock, bondholders return that portion back to the company in exchange for common stock, complete calculations for accounting required for the bond exchange, premium (discount) versus bond carrying value, number bonds converted versus shares common stock issued (decreases liabilities while increasing equity), balance sheet journal entries (T accounts) shown on balance sheet template, bonds payable, bond premium (discount), common stock, APIC (additional paid in capital), accounting detailed and explained by Allen Mursau
Views: 10209 Allen Mursau
Bond Retirement and Debt Extinguished | Intermediate Accounting | CPA Exam FAR | Chp 14 p 5
 
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bond retirement, extinguishment of debt, debt extinguished, gain on bond retirement, loss on bond retirement, Bond valuation, bond pricing, bond interest expense, par value, amortization, straight line method, effective interest rate method, bond discount, bond premium, carrying value of bond, premium, discount, bond issue between interest dates, CPA EXAM
Types of Bonds
 
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This video discusses the various types of bonds issued by firms and other organizations. It provides examples and explains the meaning of various bond characteristics, such as call features, convertibility, securitization, etc. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 70199 Edspira
Accounting Lecture 16 - Bond Issuance/Purchase With Accrued Interest
 
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From the free study guides and course manuals at www.my-accounting-tutor.com. Accounting for the sale and purchase of bonds between interest payment dates. Bonds are sold or purchased with accrued interest.
Views: 13371 Craig Pence

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