Chapter 14会计英语.ppt

Non-current Liabilities Types of Bonds Accounting for Issuing Bonds Adjusting Entries for Interesting Expenses Accounting for Redeeming Bonds Convertible Bonds Explain the non-current liabilities Identify the types of non-current liabilities Prepare the entries for the issuance of bonds Make adjusting entries for interesting expenses Understand the nature of convertible bonds * * Chapter 14 Non-current Liabilities Outline of Chapter 14 14.1 Non-current Liabilities Non-current liabilities generally include long-term borrowings such as debentures, unsecured notes, mortgage loans, unsecured long-term loans, and long-term commitments under a finance lease. They may also include provisions for long-service leave and warranty costs payable beyond the 12 months or operating cycle, as well as any long-term accounts payable. The repayment of long-term debt can often take up to 20 years. The agreement between the lender and the borrower usually provides for periodic interest payments on specified dates as well as the repayment of the amount borrowed. 14.2 Types of Bonds Bonds are debt securities that pay a fixed rate of interest (coupon) and mature at a fixed time in the future，and they are a form of interest-bearing notes payable issued by corporations, governments and governmental agencies. Most bonds provide for payment on a semiannual basis in USA and on an annual basis in China. Secured and Unsecured Term and Serial Bonds Registered and Bearer Convertible, Redeemable and Retractable 14.3 Accounting for Issuing Bonds Bonds Issued at Face Amount Assume Smith’s Company issues bonds on January 1, 200X, with a principal amount of $100,000, to be repaid in 10 years and a 12% coupon rate of interest payable semiannually. Principal: $100,000 due in 10 years (after 20 six-month periods), Interest: $ 6,000 due at the end of each six-month period, for 10 years ( $100,000×12%×6/12= $ 6,000). The following events