The accounting treatment for the issuance of bonds depends on whether the bonds are issued at par, a discount, or a premium. The bond issuing companies will record the transactions for the bond principal and the interest payments separately. Let us discuss what is the issuance of bonds and what is the accounting treatment for …
Accounting for Issuance of Bonds (Example and Journal Entry) Read More »
When investing in securities, investors may come across various terms that are relevant to the process. Some of these terms relate to the value of the underlying product in which they invest. Usually, they include face value, market value, par value, and several other terms. For most investors, these terms can be highly crucial in …
Par Value Vs Market Value: What Are the Differences? Read More »
The information presented in a company’s financial statements can provide significant insights into its operations. For stakeholders, particularly shareholders and investors, this information can be significantly crucial. Of these financial statements, most stakeholders focus on the balance sheet, income statement, and cash flow statement. Sometimes, however, the information presented in these statements may not be …
When investors purchase an asset, its value is the cost that they pay for it. However, this cost may not be the same as the amount that the market deems for its worth. On top of that, the issuer of the asset may also put a price over it. This price may not match the …
Stated value Vs. Agreed value: What are the differences? Read More »
The share price of a company’s stock may differ based on various factors. Usually, market participants and forces decide how much this stock is worth. However, some internal factors may also play a role in establishing the price that shareholders will pay for it. When companies issue shares to the general public, they can decide …
Par Value of Shares: What Is It and How to Set It Read More »
Investors can invest their resources in various financial instruments. Usually, these prefer to have share and debt instrument investments. Each of these instruments may come with unique features which differentiate them from the others. On top of those features, they may also come with various terms, which differ based on context. One such area where …
Companies issue shares to their shareholders and gets finance in exchange. This finance becomes a part of a company’s equity. Through this equity, companies can run their operations and fund various operations. Usually, shares do not stay with the same holder and may change hands several times. These shares remain in the financial statements and …
Accounting for Issuance of Treasury Stock: Example, Journal Entries and More Read More »
The bank capital is the sum of resources a bank can use against insolvency risks. Its assets include share capital, retained earnings, and loans issued. The bank capital to asset ratio is an important measure to understand the financial stability of the bank. Let us discuss what is the bank capital to asset ratio, how …
How to Calculate the Bank Capital to Asset Ratio? Read More »
Capital assets are any significant investments held by an individual or a business. As long as these assets are held by the owners, they are not subject to any taxes. Capital assets owe taxes with capital gains. The tax rates are significantly lower than ordinary income tax rates. However, taxpayers must be mindful of certain …
Are Capital Assets Subject to Tax? Ultimate Guide Read More »
The accounting treatment for the issuance of new shares depends on the market value and the form of consideration received. Commonly, companies issue new common stocks to raise additional capital from the market. Companies without a trading stock value can also issue new shares to specific investors. Let us discuss the accounting treatment of issuance …
Accounting for Issuance of New Shares: Ultimate Guide Read More »
