bonds for the cpa exam july 2016
TRANSCRIPT
I n t h i s s e c t i o n w e w i l l c o v e r :uraccounted4accounting.com
Types
I n t h i s s e c t i o n w e w i l l c o v e r :uraccounted4accounting.com
TypesValuation
I n t h i s s e c t i o n w e w i l l c o v e r :uraccounted4accounting.com
TypesValuationIssue Costs
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3 TYPES
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TermSerial
3 TYPES
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TermSerialDebenture
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THIS IS NOTTHE
FAIR VALUEOPTION
EXAMPLE
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$100,00010 YEARS
4% STATED5% EFFECTIVE
TWO THINGS
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Principal
TWO THINGS
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PrincipalInterest
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STATED $@
EFFECTIVE %
PRINCIPAL
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PV OF $100,000IN 10 YEARS
@ 5%
INTEREST
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PV OF $4,000ANNUITY
OVER 10 YEARS@ 5%
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INTEREST
PRICE
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EFFECTIVE>
STATED
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BONDISSUECOSTS
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UNDERWRITING
ACCOUNTING
REGISTRATION
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OLD METHOD
CAPITALIZES/L AMORT
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NEW METHOD
JUST LIKEDISCOUNT
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EFFECTIVEINTERESTMETHOD
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NET ONBALANCE
SHEET
R e c a p o f w h a t w e c o v e r e d :
Serial, term,debenture
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R e c a p o f w h a t w e c o v e r e d :
Serial, term,
debenturePV of principal andinterest
uraccounted4accounting.com
R e c a p o f w h a t w e c o v e r e d :
Serial, term,
debenturePV of principal andinterestBond issue costs
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