MGMT 131B Chapter Notes - Chapter 14-15: Retained Earnings, Debenture
Document Summary
Unamortized bond issue cost works like discount on bonds payable . Amortization: increase bond issue expense , straight-line method. Present value of bond/note = face value * pvf(i, n) + stated interest * pvf-oa(i, n) If market value of one security is unknown, use the incremental method: 1) assign the proceeds to securities with market values, based on market value, 2) assign the rest of proceeds to securities without market values. Sale of treasury stock above cost: the portion above cost increases apic. Sale of treasury stock below cost: (1) the portion below cost first reduces apic from treasury stock , (2) then reduces retained earnings . Dr: cash 1500 (1) apic 500 (2) re 500. Faith evans corporation is a regional company which is an sec registrant. The corporation"s securities are thinly traded on nasdaq. par, 12% subordinated debenture and 10 shares of par common stock. The investment banker has retained 400 units as the underwriting fee.
