Cheat Sheet December Exam

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Department
Business Administration
Course
Business Administration 2257
Professor
Chris Sweeney
Semester
Fall

Description
Bonds Stocks Issuance Preferred get paid first cumulative dividends Organization Costsasset account DR Organization Costs DR Cash CR Bonds Payable reflect face value If cash receivedFV this is a premium CR Cash DR Cash for bond and premiumNo entry at authorization CR Bond Payable CR Premium on bonds payable IssuanceDR CashAsset CR CommonPreferred Stock If cash receivedFV this is a discountDR Cash for bondDonated CapitalDR CashAsset CR Donated Capital DR Discount on Bonds Payable contra liabCR Bonds payable for FV Preferred Share conversionDR preferred stock CRcommon stock use book value multiply by value of shares Interest converting divided by percentage of shares converting Calculated on payment dates yearend major transactionsFVinterestn12 semiannual payments Cash Dividends DR interest expense CR Cash Date of declaration DR retained earnings CR dividends Must be accrued DR Bond Interest X CR Bond Interest payable payableRecord date no entry Amortization Date of Payment DR dividends payable CR Cash If Premium DR Bond Premium CR Bond Interest XIf DiscountDR Bond Interest X CR Bond Discount Preferred Dividends in arrears cumulative Straight Linecalculate at year end major recalls or conversionsRecord date no entry Total value of PremiumDiscount Divided by Total Life of Bond Date of declaration DR retained earnings CR dividends Or Remaining Value of PremiumDiscount Divided by Remaining Life of payable Pay attention how many periods they need to be Bond paid for Effective Interest Methodif not spread evenly amortize at interestpayment dates fiscal year end major events Stock Dividends Based on market interest rate Multiply number of common shares outstanding by Interest ExpenseBond value x market interest rate on date issued x n12 percentage dividend declared this isof new shares Contract Interestface value x contract interest rate x n12 Multiply the number of new shares by market price on Amortizationinterest expensecontract interest declaration day Book Value is face value unamortized premiumdiscount Declaration date DR retained Earnings CR Stock dividendto be distributed Retirement of Bond Date of record no entry Step 1 calculate interest up to retirement CR Cash DR Bond Interest X Distribution date
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