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York University
ACTG 2011
Marcia Annisette

To record depreciation expense: dr. depreciation expense cr. accumulated depreciation If quarter way through year asset is sold for 400000, record quarter of the depreciation expense dr. depreciation expense 25000 cr. accumulated depreciation 25000 On date of sale, accumulated depreciation is 725000 and carrying amount is (1200000 – 725000 = 475000) Dr. cash 400000 dr. accumulated depreciation (contra asset) 725000 dr. loss on sale 75000 cr. equipment (1200000) write down building to recoverable amount dr. loss due to impairment of building cr. accumulated depreciation CURRENT LIABILITIES – accounts payable – collections on behalf of third parties sale of tv and collection of GST dr. cash cr. revenue cr. GST payable when future shop remits money to gov't: dr. GST payable cr. cash – income taxes payable – dividends payable – accrued liabilities and provisions – unearned revenue gift card sale: dr. cash cr. unearned revenue – gift card When card is used dr. unearned revenue cr. revenue callable bond – option to repurchase the bond convertible- can be exchanged by investor for other securities of issuing entity, like common stock retractable – investors can cash in bond before maturity date selling bonds at face value: dr. cash 5000 cr. long term debt-bonds 5000 record payment of interest and interest expense: dr. interest expense 225000 cr. cash 225000 when bond matures, entry made to derecognize the bond: dr. long-term debt – bonds 5000 cr. cash 5000 selling bonds at a discount (less than face value): Discount recorded in contra-liability account dr. cash 4806946 dr. bond discount (contra-liability) 193054 cr. longterm debt – bonds 5000000 entry made each semi annual period amortization: dr. interest expense 244,305 cr. bond discount (contra liability - ) 19305 cr. cash 225000 selling bonds at a premium: dr. cash 5202773 cr. bond premium (contra liability +) 202773 cr. long-term debt (liability +) 5000000 semi annual interest payment: dr. interest expense 204723 dr. bond premium 20277 cr. 225000 accruing interest on long-term debt accrue interest expense from oct 1 to dec 31 dr. interest expense 112,500 cr. interest payable 112,500 march 31, when bardal actually pays interest: dr. interest expense 112500 dr. interest payable 112500 cr. cash 225000 recording early retirement of bonds on dec 31, 2014 dr. long term debt – bonds (liability) 100000 dr. loss on redemption of bond 308,000 cr. bond discount (contra liability - ) cr. cash 1250000 decrease in market value of debt: dr. long term debt (liability -) xxx cr. gain on decrease in market value of long term debt xxx capital lease, acquisition of computers: dr. assets under capital lease cr. lease liability record depreciation expense: dr. depreciation expense cr. accumulated depreciation record lease payment in 2015 dr. interest expense 25,359 dr. lease liability 54,641 cr. cash 80000 if operating lease, entry required when payment was made or became payable. dr. lease expense 80000 cr. cash 80000 defined contribution plan, employed makes contribution as specified in pension agreement, ie percentage of wage. Recording contribution: dr. pension expense 250000 cr. cash 200000 cr. pension liability 50000 defined benefit plan, employer promises to provide employees with specified benefits each year they are retired. Employer bears risk with defined benefit plan, but contribution plan depends on performance of pension plan. Interest coverage ratio = interest expense + net income + income tax expense / interest expense CHAPTER 10 common shares represent residual ownership in an entity, these shareholders are last to be satisfied preferred shares are shares with rights that must be satisfied before common shareholders – cumulative – convertible – redeemable – retractable – participating they're hybrid securities, characteristics of both debt and equity to record repurchase of 395000 common shares dr. retained earnings 4625000 dr. common shares 47000 cr. cash 4672000 to correct error in accounting for the purchase of land in 2012: dr. land 700000 cr. retained earnings (SE+) 700000 to record declaration of $0.25/preferred share and $0.10 per common share on Dec 15,2014: dr. retained earnings 115,500 cr. divident payable on common shares 50000 cr. divident payable on preferred shares 62500 to record payment of preferred and common share dividends on jan 12, 2015: dr. dividend payable on common shares 50000 dr. divident payable on preferred shares 62500 cr. cash 112500 property dividends – paid with property instead of cash, like shares of another corporation to record gain on shares of rylstone as property divident dr. investment in rylstone 2200000 cr. gain on disposal of investments (income statement, SE +) 2200000 to record declaration of property dividend dr. retained earnings 7200000 cr. pr
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