Business Administration 2257 Chapter Notes -Accrued Interest
31 May 2014
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Trading investments purchasing other companies" stocks: purchasing stock price of the stock , selling your stock any related fees. Decrease cash: receiving dividends only recognized when received (not declared) Update the number of shares owned: adjusting for market value at fiscal. Year end reflects any unrealized gains/losses in investment: market value drops. Determine cash received (proceeds) from the sale: step 2: calculate the book value of the stock market price ( of stocks, step 3: determine if you made a gain or loss on sale and record. Cash proceeds sale (step 1) book value of stock (step 2) Trading investments purchasing other companies" bonds: purchasing stock (and paying for accrued interest on the bond, step 2: determine if you made a gain or loss on sale. Upon acquisition, pay for the interest owner accrued since last payment. Note: counter intuitive, but at next payment, you will get , but is yours and is theirs.
