TAILIEUCHUNG - Lecture Intermediate accounting - Chapter 14: Bonds and long-term notes

This chapter continues the presentation of liabilities. Specifically, the discussion focuses on the accounting treatment of long-term liabilities. Long-term notes and bonds are discussed, as well as the extinguishment of debt and debt convertible into stock. | Bonds and Long-Term Notes Chapter 14 Chapter 14: Bonds and Long-Term Notes This chapter continues the presentation of liabilities. Specifically, the discussion focuses on the accounting treatment of long-term liabilities. Long-term notes and bonds are discussed, as well as the extinguishment of debt and debt convertible into stock. The Nature of Long-Term Debt Liabilities signify creditors’ interest in a company’s assets. A note payable and note receivable are two sides of the same coin. Periodic interest is the effective interest rate times the amount of the debt outstanding during the period. Debt is reported at its present value A bond payable divides a large liability into many smaller liabilities. Corporations issuing bonds are obligated to repay a stated amount at a specified maturity date and period interest between the issue date. A company must raise funds to finance its operations and often the expansion of those operations. Presumably, at least some of the necessary funding can be provided by the company’s own operations, though some funds must be provided by external sources. Ordinarily, external financing includes some combination of equity and debt funding. We explore debt financing first. The existence of long-term debt: Signifies creditors’ interest in a company’s assets. Requires the future payment of cash in specified (or estimated) amounts, at specified (or projected) dates. Requires interest accrual on the debt, as time passes. Recognizes that periodic interest is the effective interest rate times the amount of the debt outstanding during the interest period. Debt is reported at the present value of its related cash flows (principal and/or interest payments), discounted at the effective rate of interest at issuance. Bonds Bond Selling Price Bond Certificate Interest Payments Face Value Payment at End of Bond Term At Bond Issuance Date Company Issuing Bonds Subsequent Periods Investor Buying Bonds Company Issuing Bonds Investor Buying Bonds Bonds

• Kế toán - Kiểm toán
• Intermediate accounting
• Lecture Intermediate accounting
• Financial Accounting
• Long term debt
• Bond indenture
• Recording bonds
• Accounting process
• Accounting equation
• Accounting processing cycle
• Stock issuance
• Estimating reserves
• Liquidating dividends
• Accounting changes
• Error corrections
• Accounting choices
• Theoretical structure
• Accrual accounting
• Financial accounting environment
• Accounting for leases
• Leasing environment
• Accounting by lessee
• Special accounting problems
• Cash versus accrual accounting
• International standard setting
• Accounting standards
• Accounting assists
• The challenges facing accounting
• Income taxes
• Accounting for income taxes
• Deferred tax liabilities
• Error analysis
• Accounting policy
• Accounting estimate
• Accounting policies
• Financial reporting
• Accounting information system
• Measurement issues
• Characteristics of accounting
• Capital allocation process