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Midterm

ACCT316 Study Guide - Midterm Guide: Amortization Schedule, Dividend, Accrued Interest


Department
Accounting
Course Code
ACCT316
Professor
Jenkins David
Study Guide
Midterm

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Bonds Chapter 14:
Discount/(Premium): FV PV (If market rate<stated rate, premium)
Accrued Interest: (FV*stated int)*months after date, before issuance (x/12)
Journal Entries for Bonds:
Issuance Date: Cash Issue price + accrued interest
Discount on Bonds Payable Discount amount
Bonds Payable FV
Interest Expense Accrued interest
Unamortized BIC (asset) Unamortized BIC $
Cash Unamortized BIC $
6 month int: Interest Expense From amortization schedule
Discount on Bonds Payable Plug figure
Cash FV*stated interest
EOY interest: Interest Expense From amortization schedule
Discount on Bonds Payable Plug figure
Interest Payable FV*stated interest
Bond Issue Expense BIC/years of bond
Unamortized BIC BIC/years of bond
Beg of next year: Interest Payable Interest payable from EOY
Cash Int pay from EOY
Early Redemption of Bonds:
Reacquisition Costs (RC) = Recall Price (FV*% (i.e. 102 = 1.02)) + Expenses of recall
Net Carrying Value (NCV) = FV Unamortized Discount (int exp from amort sched not paid yet)
Unamortized BIC (BIC*(years left/total years))
If RC > NCV, there is a loss: Loss on Recall = RC NCV: just an accounting loss, not financial loss
Journal Entry:
Reacquisition Date Bonds Payable FV
Loss on Recall Loss $
Discount on Bonds Pay Unamortized Discount (above)
Unamortized BIC Unamortized BIC (above)
Cash Plug figure
Chapter 15:
Journal Entries for Stock:
(Buys stock)
Treasury Stock # of shares*$ paid per share
Cash # of shares*$ paid per share
(Sells stock)
Cash # of shares*$ received per share
Treasury Stock # of shares*$ paid per share
PIC Treasury Stock Plug figure***
***If you need to debit PIC Treasury Stock but there isn’t enough in the account,
Anything over the balance would be debited to retained earnings
(Stock dividend declared)
Retained Earnings (Total # of shares*dividend %)*market price
Common Stock (Total # of shares* dividend %)*par value
APIC Common Stock Plug figure
(Stock split)
No journal entry just a memo
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