Topic 7 Accounting For Liability And Owner Equity
•Transferir como PPTX, PDF•
0 gostou•280 visualizações
Recomendados
Mais conteúdo relacionado
Mais procurados
Destaque
Destaque (19)
Semelhante a Topic 7 Accounting For Liability And Owner Equity
Semelhante a Topic 7 Accounting For Liability And Owner Equity (20)
Mais de mandalina landy
Mais de mandalina landy (20)
Último
Último (20)
Topic 7 Accounting For Liability And Owner Equity
- 1. 1 Topic 7 ACCOUNTING FOR LIABILITY AND OWNER’S EQUITY
- 2. 2 Current Liability An obligation that needs to be settled within one year. Creditors An amount owed to the supplier, for stock purchased. Unearned Revenue Cash received and recorded before the services being performed or stock delivered. Accrued Expense An expense charged but still unpaid or recorded at the period in which the financial statement is prepared.
- 4. total face value: amount of principal the issuer must pay at the maturity date.
- 6. 5 To record the interest payable. Assume the interest is paid twice a year i.e. 1 January and 1 July 2007. 1,000,000 x 9% x 6/12 = RM45,000. 1 July 2007 Dr. Interest expense 45,000 Cr. Cash 45,000 (To record payment of bond interest)
- 7. 6 Adjusting Entry: 31 December 2007 Dr. Interest expense 45,000 Cr. Interest payable 45,000 (To record interest payable) When the interest is paid on 1 Jan 2008 Dr. Interest payable 45,000 Cr. Cash 45,000 At the Year 10:(maturity date) Dr. Bond payable 1,000,000 Cr. Cash 1,000,000
- 8. 7 LOANS PAYABLE BY INSTALMENT Entities may borrow money from a single borrower in the form of loan. It is common for such loans to be repayable by instalment, e.g. mortgages. A mortgage is a loan secured by a charge over property. If the borrower is unable to repay the loan, the lender may sell the property and use the proceeds to repay the loan.
- 9. 8 Accounting for Loans Payable by Instalment Mortgage payments consist of: Interest expense and Reduction of loan liability Journal entry to record mortgage payment Mar 31 Interest Expense 1 000 Loan Payable 9 000 Cash at Bank 10 000 (To record loan repayment for March)
- 10. 9 Components of Long-Term Debt Entities often have a portion of long-term debt that falls due within the coming year. This portion of the long-term debt should be classified as a current liability. The remainder will be classified as a non-current liability. An adjusting entry is not necessary to recognise the current portion of the liability. It is recognised by proper classification on the balance sheet.
- 12. Drawing: reduced the amount of owner’s equity
- 13. Profit and Loss: Profit increase the owner’s equity Loss decrease the owner’s equity