A bond is considered a fixed-income debt instrument that provides finance to companies and issuers. In most cases, these instruments come with a fixed interest rate. However, some may also come with a floating rate. Either way, bonds allow companies to raise finance. In exchange, it provides the investor with the right to receive interest […]
What are Bonds Payable? Are they Current or Non-current liabilities? Read More »
A company’s capital structure represents its combination of equity and debt finance. Usually, the former includes money collected from shareholders by issuing shares. These shares may consist of both ordinary and preferred stock. On top of that, equity also consists of retained earnings and other reserves. This finance source is long-term compared to debt finance.
Are Bonds Assets or Liabilities? (Explained) Read More »
A bond is a fixed-income instrument that allows companies to receive funds. On the other hand, it provides the acquirer with the right to obtain fixed interest payments in the future. In practice, however, bonds are more complex than that. These instruments come from multiple sources, for example, companies, local governments, etc. However, they hold
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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 »
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
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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 »
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 bank’s financial stability. Let us discuss the bank capital to asset ratio, how it is calculated, and
How to Calculate the Bank Capital to Asset Ratio? 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
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In a common notion, a bank account title represents the account owners of a bank account. However, the legal owners and the bank account title can differ in many cases. A bank account title has several uses, which is important for the account holders. It has several legal and compliance uses as well. Let us
What is a Bank Account Title? (Explained) Read More »
