century 21 accounting © 2009 south-western, cengage learning lesson 12-1 capital stock transactions
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 12-1LESSON 12-1
Capital Stock Transactions
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
Numberof Shares
Par Valueper Share
=Total Par
Value×
1. Calculate the amounts to be recorded.
2. Write the date.
6. Record the credit amount.
5. Write the debit amount.
3. Enter the account title.
4. Record the receipt number.
ISSUING PREFERRED STOCK AT ISSUING PREFERRED STOCK AT PAR VALUEPAR VALUE page 343
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800 $100.00 = $80,000.00×
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
Numberof Shares
Valueper Share
= Value×
4. Record the receipt number.
ISSUING PREFERRED STOCK FOR ISSUING PREFERRED STOCK FOR MORE THAN PAR VALUEMORE THAN PAR VALUE page 344
1. Calculate the amounts to be recorded.
2. Write the date.
6. Record the credit amounts.
5. Write the debit amount.
3. Enter the account titles.
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300 $120.00 = $36,000.00×Total received
300 100.00 = 30,000.00×Par value
$ 6,000.00Amount received in excess of par value
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
Numberof Shares
Valueper Share
= Value×
4. Record the receipt number.1. Calculate the amounts to be recorded.
2. Write the date.
6. Record the credit amount.
5. Write the debit amounts.
3. Enter the account titles.
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page 345
500 $100.00 = $50,000.00×Par value
500 90.00 = 45,000.00×Total received
$ 5,000.00Total discount
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ISSUING PREFERRED STOCK FOR ISSUING PREFERRED STOCK FOR LESS THAN PAR VALUELESS THAN PAR VALUE
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
ISSUING PREFERRED STOCK FOR ISSUING PREFERRED STOCK FOR ASSETS OTHER THAN CASHASSETS OTHER THAN CASH page 346
Numberof Shares
Valueper Share
= Value×
4. Record memorandum number.1. Calculate the amounts to record.
2. Write the date.
6. Record the credit amount.
5. Write the debit amount.
3. Enter the account titles.
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100 $120.00 = $12,000.00×Total received
100 100.00 = 10,000.00×Par value
$ 2,000.00Amount received in excess of par value
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LESSON 12-1
ISSUING COMMON STOCK ISSUING COMMON STOCK WITH NO PAR VALUEWITH NO PAR VALUE page 347
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
ISSUING COMMON STOCK ISSUING COMMON STOCK WITH A STATED VALUEWITH A STATED VALUE page 347
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-1
TERM REVIEWTERM REVIEW
discount on capital stock
page 348
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 12-2LESSON 12-2
Treasury Stock Transactions
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-2
2. Enter the account title.
3. Record the check number.
1. Write the date.
5. Record the credit amount.
4. Write the debit amount.
BUYING TREASURY STOCKBUYING TREASURY STOCK page 350
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LESSON 12-2
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SELLING TREASURY STOCK FOR SELLING TREASURY STOCK FOR ORIGINAL COSTORIGINAL COST page 351
2. Enter the account title.
3. Record the receipt number.
1. Write the date.
5. Record the credit amount.
4. Write the debit amount.
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LESSON 12-2
Numberof Shares
Valueper Share
= Value×
4. Record the receipt number.
SELLING TREASURY STOCK FOR SELLING TREASURY STOCK FOR MORE THAN ORIGINAL COSTMORE THAN ORIGINAL COST page 352
1. Calculate the amounts to be recorded.
2. Write the date.
6. Record the credit amounts.
5. Write the debit amount.
3. Enter the account titles.
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200 $15.00 = $3,000.00×Total received
200 12.00 = 2,400.00×Original cost
$ 600.00Amount received in excess of original cost
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-2
Numberof Shares
Valueper Share
= Value×
4. Record the receipt number.1. Calculate the amounts to be recorded.
2. Write the date.
6. Record the credit amount.
5. Write the debit amount.
3. Enter the account title.
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page 353
50 $12.00 = $600.00×Original cost
50 10.00 = 500.00×Total received
$100.00Amount received less than original cost
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SELLING TREASURY STOCK FOR SELLING TREASURY STOCK FOR LESS THAN ORIGINAL COSTLESS THAN ORIGINAL COST
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-2
TERM REVIEWTERM REVIEW
treasury stock
page 354
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 12-3LESSON 12-3
Bonds Payable Transactions
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-3
ISSUING BONDSISSUING BONDS page 356
1. Record the issuance of the bonds.
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LESSON 12-3
Balance Owed on Bond Issue
Bond Interest Rate
=AnnualInterest×
$250,000.00 12% = $30,000.00×
2. Record the payment of the interest.
1. Calculate the annual interest.
PAYING INTEREST ON BONDSPAYING INTEREST ON BONDS page 356
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LESSON 12-3
1. Record the initial payment to the bond sinking fund.
DEPOSITING CASH IN A DEPOSITING CASH IN A BOND SINKING FUNDBOND SINKING FUND page 357
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-3
Amount of Increase in Sinking Fund
Interest Earned During Year
=Amount to be
Deposited–
$50,000.00 $2,000.00 = $48,000.00–
2. Record the payment to the bond sinking fund.
1. Calculate the amount to be deposited in the fund.
DEPOSITING CASH TO SINKING FUND DEPOSITING CASH TO SINKING FUND AND RECORDING INCOME EARNEDAND RECORDING INCOME EARNED page 357
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LESSON 12-3
July 1, 20X4. Received notice from bond trustee that bond issue was retired using bond sinking fund, $250,000.00. Memorandum No. 600.
Bonds Payable
Retired 250,000.00 Balance 250,000.00(New Bal. zero)
Bonds Sinking Fund
Balance 250,000.00(New Bal. zero)
Retired 250,000.00
RETIRING A BOND ISSUERETIRING A BOND ISSUE page 358
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 12-3
TERMS REVIEWTERMS REVIEW
bond bond issue trustee bond sinking fund retiring a bond issue term bonds serial bonds
page 360