Slide AKT 102 Pertemuan 5
Slide
10-1
Chapter
10
Liabilities
Financial Accounting, IFRS Edition
Weygandt Kimmel Kieso
Slide
10-2
Section 2 Non-Current Liabilities
Bond
Bond Basics
Basics
Bonds are a form of interest-bearing notes payable.
Three advantages over ordinary shares:
1. Stockholder control is not affected.
2. Tax savings result.
3. Earnings per share may be higher.
Slide
10-3
SO 4 Explain why bonds are issued, and identify the types of bonds.
Issuing
Issuing Bonds
Bonds at
at aa Discount
Discount
Question
Discount on Bonds Payable:
Slide
10-4
a.
has a credit balance.
b.
is a contra account.
c.
is added to bonds payable on the statement of
financial position.
d.
increases over the term of the bonds.
SO 5 Prepare the entries for the issuance of bonds and interest expense.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Long-Term Notes Payable
May be secured by a mortgage that pledges title to
specific assets as security for a loan.
Typically, terms require the borrower to make installment
payments over the term of the loan. Payment consists of
1. interest on the unpaid balance of the loan and
2. a reduction of loan principal.
Companies initially record mortgage notes payable at
face value.
Slide
10-5
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Illustration: Porter Technology Inc. issues a $500,000, 12%, 20year mortgage note on December 31, 2011. The terms provide for
semiannual installment payments of $33,231 (not including real
estate taxes and insurance). The installment payment schedule for
the first two years is as follows.
Illustration 10-17
Slide
10-6
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Illustration: Porter Technology Inc. issues a $500,000, 12%, 20year mortgage note on December 31, 2011. The terms provide for
semiannual installment payments of $33,231 (not including real
estate taxes and insurance). The installment payment schedule for
the first two years is as follows.
Dec. 31
Cash
500,000
Mortgage notes payable
Jun. 30
Interest expense
Mortgage notes payable
Cash
Slide
10-7
500,000
30,000
3,231
33,231
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Question
Each payment on a mortgage note payable consists of:
Slide
10-8
a.
interest on the original balance of the loan.
b.
reduction of loan principal only.
c.
interest on the original balance of the loan and
reduction of loan principal.
d.
interest on the unpaid balance of the loan and
reduction of loan principal.
SO 7 Describe the accounting for long-term notes payable.
Copyright
Copyright
“Copyright © 2011 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and not for
distribution or resale. The Publisher assumes no responsibility for
errors, omissions, or damages, caused by the use of these
programs or from the use of the information contained herein.”
Slide
10-9
10-1
Chapter
10
Liabilities
Financial Accounting, IFRS Edition
Weygandt Kimmel Kieso
Slide
10-2
Section 2 Non-Current Liabilities
Bond
Bond Basics
Basics
Bonds are a form of interest-bearing notes payable.
Three advantages over ordinary shares:
1. Stockholder control is not affected.
2. Tax savings result.
3. Earnings per share may be higher.
Slide
10-3
SO 4 Explain why bonds are issued, and identify the types of bonds.
Issuing
Issuing Bonds
Bonds at
at aa Discount
Discount
Question
Discount on Bonds Payable:
Slide
10-4
a.
has a credit balance.
b.
is a contra account.
c.
is added to bonds payable on the statement of
financial position.
d.
increases over the term of the bonds.
SO 5 Prepare the entries for the issuance of bonds and interest expense.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Long-Term Notes Payable
May be secured by a mortgage that pledges title to
specific assets as security for a loan.
Typically, terms require the borrower to make installment
payments over the term of the loan. Payment consists of
1. interest on the unpaid balance of the loan and
2. a reduction of loan principal.
Companies initially record mortgage notes payable at
face value.
Slide
10-5
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Illustration: Porter Technology Inc. issues a $500,000, 12%, 20year mortgage note on December 31, 2011. The terms provide for
semiannual installment payments of $33,231 (not including real
estate taxes and insurance). The installment payment schedule for
the first two years is as follows.
Illustration 10-17
Slide
10-6
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Illustration: Porter Technology Inc. issues a $500,000, 12%, 20year mortgage note on December 31, 2011. The terms provide for
semiannual installment payments of $33,231 (not including real
estate taxes and insurance). The installment payment schedule for
the first two years is as follows.
Dec. 31
Cash
500,000
Mortgage notes payable
Jun. 30
Interest expense
Mortgage notes payable
Cash
Slide
10-7
500,000
30,000
3,231
33,231
SO 7 Describe the accounting for long-term notes payable.
Accounting
Accounting for
for Long-Term
Long-Term Notes
Notes Payable
Payable
Question
Each payment on a mortgage note payable consists of:
Slide
10-8
a.
interest on the original balance of the loan.
b.
reduction of loan principal only.
c.
interest on the original balance of the loan and
reduction of loan principal.
d.
interest on the unpaid balance of the loan and
reduction of loan principal.
SO 7 Describe the accounting for long-term notes payable.
Copyright
Copyright
“Copyright © 2011 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful.
Request for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and not for
distribution or resale. The Publisher assumes no responsibility for
errors, omissions, or damages, caused by the use of these
programs or from the use of the information contained herein.”
Slide
10-9