文档介绍:Intermediate Accounting 13 Accounting and Reporting of Long-Term Liabilities
Accounting and Reporting of
Long-Term Liabilities
Chapter
13
Current Liabilities and Contingencies
Bonds Payable
Long-Term Notes Payable
Reporting and Analysis of Long-Term Debt
Issuing bonds
Types and ratings
Valuation
Effective-interest method
Costs of issuing
Treasury bonds
Extinguishment
Notes issued at face value
Notes not issued at face value
Special situations
Mortgage notes payable
Off-balance-sheet financing
Presentation and analysis
Bonds Payable
Long-term debt consists of probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of pany, whichever is longer3>.
LO 1 Describe the formal procedures associated with issuing long-term debt.
Examples:
Bonds payable
Notes payable
Mortgages payable
Pension liabilities
Lease liabilities
Long-term debt has various covenants or restrictions.
Issuing Bonds
LO 1 Describe the formal procedures associated with issuing long-term debt.
Bond contract known as a bond indenture.
Represents a promise to pay:
sum of money at designated maturity date, plus
periodic interest at a specified rate on the maturity amount (face value).
Paper certificate, typically a $1,000 face value.
Interest payments usually made semiannually.
Purpose is to borrow when the amount of capital needed is too large for one lender to supply.
Types of Bonds
LO 2 Identify various types of bond issues.
Common types found in practice:
Secured and Unsecured (debenture) bonds,
Term, Serial, and Callable bonds,
Convertible bonds, Commodity-backed bonds, Deep-discount bonds (Zero-interest debenture bonds),
Registered bonds and bearer or coupon bonds,
e and Revenue bonds.
Valuation of Bonds – Discount and Premium
LO 3 Describe the accounting valuation for bonds at date of issuance.
Between the time pany sets the terms and the time it issues the bonds,