How to deal with the accounting entries of bond issuance? Accounting entries for the issuance of bon

On July 1, 2006, enterprise B issued a three-year bond with an annual interest rate of 8% and a total face value of RMB 4,000,000.

When issuing bonds.

Debit: Bank deposit 4000000

Credit: Bonds payable - par value 4000000

If the interest is paid in instalments, it is said that the interest is paid at the end of each year.

Interest-bearing debit: financial expenses 320,000

Credit: Interest payable 320,000

When paying interest, borrow: interest payable 320,000

Credit: Bank deposit 320000

The second year is omitted. Interest-bearing debit: financial expenses 320,000

Credit: Interest payable 320,000

Repay the principal in the third year and pay interest in the final year.

Borrow: Bonds payable - par value 4000000

Interest payable 320,000

Credit: Bank deposit 4320000

Lump sum debt and interest payments.

When calculating interest, borrow: financial expenses 320,000

Credit: Bonds Payable - Accrued Interest 320,000

The second year, the third year is omitted.

When repaying principal and interest.

Borrow: Bonds payable - par value 4000000

Bonds payable - Accrued interest 960000

Credit: Bank deposit 4960000

Borrow: Bank Deposits Credit: Bonds Payable.

"Accounting entries for bonds issued, debit: bank deposits, credit: bonds payable - par value (par value of bonds) interest adjustment (difference).

Interest accrued at the end of the period, borrowing: construction in progress, manufacturing expenses, financial expenses, etc., bonds payable - interest adjustment, credit: interest payable (interest on bonds paid in installments), bonds payable - accrued interest.

Bonds payable are bonds issued by businesses to raise (long-term) funds. The funds obtained through the issuance of bonds constitute a non-current liability of the enterprise, and the enterprise will repay the principal and interest at a specific date in the future according to the interest rate and maturity recorded in the bonds.

Enterprises should set up the "Bonds Payable" account, and set up "Face Value", "Interest Adjustment", "Accrued Interest" and other detailed accounts under this account.

Accounting Accounts:

This account accounts for the bonds actually issued by banks to raise long-term funds and the interest payable.

When a bank issues bonds, if the issuance cost is greater than the interest income generated by the frozen funds during the issuance period, the difference between the issuance cost and the interest income generated by the frozen funds during the issuance period shall be treated in accordance with the principle of capitalization of borrowing costs according to the purpose of the funds raised by issuing the bonds.

If it is used for other purposes, it shall be included in the profit or loss for the current period. If the issuance cost is less than the interest income generated by the frozen funds during the issuance period, the difference between the interest income generated by the frozen funds during the issuance period and the issuance cost shall be regarded as the premium income of the issuance of bonds, which shall be amortized during the life of the bonds when the interest is accrued.

The treatment of other borrowing costs shall be handled in accordance with the provisions on the capitalization of borrowing costs of long-term borrowing. A bank issues a convertible bank bond with a redemption option, and the interest compensation that may be paid on the redemption date.

That is, the difference between the interest payable on the expiration date of the agreed redemption period of the bond and the coupon interest payable on the bond shall be accrued during the period from the date of issuance of the bond to the expiration date of the agreed redemption of the bond, and the interest payable shall be treated according to the principle of capitalization of borrowing costs.

Complete accounting entries for the issuance of bonds.

Debit: Bank deposit (actual receipt).

Bonds payable – interest adjustment (squeeze, borrowable and loanable).

Credit: Bonds Payable – Face Value.

Note: The issuance cost of the bond issuance should be included in the initial cost of the bond issuance and is reflected in the "Bonds Payable - Interest Adjustment" detail account.

Recognize the interest payable accounting entry.

Borrow: construction in progress, manufacturing costs, financial expenses, R&D expenditures, etc.

Credit: Interest payable.

Bonds payable – interest adjustment (squeeze).

At the time of each instalment of interest.

Debit: Interest payable.

Credit: Bank deposits.

Accounting entries at the time of repayment of bonds.

When calculating the last installment of interest:

Borrow: Construction in progress Financial expenses Manufacturing expenses R&D expenditures (squeezed) Credit: Interest payable.

Bonds payable – interest adjustment (calculated first).

When the principal is repaid at maturity and the last instalment of the bond:

Borrow: Bonds payable – face value.

Interest payable (last interest).

Credit: Bank deposits.

The embedded interest rate is: 75000*,r,3)+75000*(p f,r,3)=74325 r=

June 4: Borrow: bank deposit 74325

Bonds Payable - Interest Adjustment 675

Credit: Bonds payable – face value 75,000

First Year Interest:

Borrow: Finance Charges.

Credit: Bonds Payable - Interest Adjustments.

Interest payable 4650

Borrow: Interest payable 4650

Credit: Bank deposit 4650

Interest paid in the second year:

Borrow: Finance Charges.

Credit: Bonds Payable - Interest Adjustments.

Interest payable 4650

Borrow: Interest payable 4650

Credit: Bank deposit 4650

Interest payment in the third year:

Borrow: Finance Charges.

Credit: Bonds Payable - Interest Adjustments.

Interest payable 4650

Borrow: Bonds payable - face value 75,000

Interest payable 4650

Credit: Bank deposit 79650

For the business of related bonds, enterprises generally set up bank deposit accounts, bond payable accounts and interest payable accounts for relevant accounting.

Borrow: Bank deposit.

Credit: Bonds Payable – Face Value (Face Value of Bonds).

Bonds Payable – Interest Adjustment (Difference).

Interest accrued at the end of the period.

Borrow: construction in progress, manufacturing expenses, financial expenses and other accounts.

Bonds Payable – Interest Adjustments.

Credit: Interest payable (interest on instalment bonds).

Bonds payable - accrued interest (interest on Qichan bonds with one-time repayment of principal and interest at maturity).

Repayment of principal and interest at maturity.

Borrow: Bonds payable – face value.

Bonds payable – Accrued interest (interest on bonds that are paid in a lump sum at maturity).

Interest payable (the last interest on an amortization bond).

Credit: Bank deposits.

It is important to note that:

1) If the enterprise issues bonds to raise funds for the purchase and construction of fixed assets, and the difference in issuance costs is large, the cost of the purchased and constructed fixed assets shall be directly included in the cost of the purchased and constructed fixed assets before they reach the intended usable state.

2) If the funds raised by the enterprise through the issuance of bonds are specifically used for the purchase and construction of fixed assets, and the difference in issuance costs is large, it shall be directly included in the current financial expenses after the purchased and constructed fixed assets reach the intended state of use.

3) If the funds raised by the enterprise through the issuance of bonds are specifically used for the purchase and construction of fixed assets, but the difference in the issuance cost is not large, it shall be directly included in the current financial expenses.

4) If the funds raised by the enterprise through the issuance of bonds are not used for the purchase and construction of fixed assets, they are directly included in the financial expenses of the current period.

What is a bond payable?

Bonds payable refer to a written proof of the nature of a long-term loan with a term of more than one year issued by an enterprise for the purpose of raising funds, and a written commitment to repay principal and interest within a certain period of time.

What is Interest Payable?

The interest payable refers to the interest payable by the enterprise in accordance with the contract, including the interest payable on deposits, long-term loan loans for repayment of principal due to installments, and corporate bonds. In accounting, interest payable also refers to the "interest payable" account, which accounts for the interest payable by the enterprise in accordance with the contract. Enterprises can conduct detailed verification by depositor or creditor.

The closing credit balance of this account reflects the unpaid interest payable by the enterprise.

When the company needs funds for operation, it can borrow from financial institutions or issue bonds, ** and other ways to raise funds, when the company issues bonds, how should the specific accounting entries be prepared?

Accounting entries for the issuance of bonds?

1. When issuing bonds.

Borrow: Bank deposit.

Credit: Bonds Payable – Face Value (Face Value of Bonds).

Bonds Payable – Interest Adjustment (Difference).

2. Interest accrued at the end of the period.

Borrow: construction in progress, manufacturing expenses, financial expenses and other accounts.

Bonds Payable – Interest Adjustments.

Credit: Interest payable (interest on instalment bonds).

Bonds payable - accrued interest (interest on bonds with one-time repayment of principal and interest at maturity) 3. Repayment of principal and interest at maturity.

Borrow: Bonds payable – face value.

Bonds Payable – Interest accrued (interest on bonds with a lump sum of principal and interest payments at maturity) Interest payable (the last interest on an amortization bond).

Credit: Bank deposits.

What is a Bond?

Bonds are issued by enterprises, banks, etc., in accordance with legal procedures, in order to raise funds, and promise creditors to repay the principal and interest on a specified date. The recorded cost of a bond is calculated by subtracting the interest received at maturity plus transaction costs, and the subsequent measurement is the amortized cost of the bond at the beginning of the period multiplied by the effective interest rate. Bonds that are repaid in instalments are discounted, and the investment income and amortized cost of each instalment are rising.

What is the interest payable?

The interest payable refers to the interest payable by the enterprise in accordance with the contract, including the interest payable on long-term loans that absorb deposits, pay interest in installments and repay the principal when due, and the interest payable on corporate bonds. This account can be accounted for in detail by depositor or creditor. Difference Between Interest Payable and Interest Accrued:

The interest payable belongs to borrowings, and the accrued interest belongs to corporate deposits.

Bonds, also known as fixed income**, are classified by repayment period, including short-term bonds, medium-term bonds and long-term bonds.

Issuance of bond entries.

Complete accounting entries for the issuance of bonds.

Debit: Bank deposit (actual receipt).

Bonds payable – interest adjustment (squeeze, borrowable and loanable).

Credit: Bonds Payable – Face Value.

Note: The issuance cost of the bond issuance should be included in the initial cost of the bond issuance and is reflected in the "Bonds Payable - Interest Adjustment" detail account.

Recognize the interest payable accounting entry.

Borrow: construction in progress, manufacturing costs, financial expenses, R&D expenditures, etc.

Credit: Interest payable.

Bonds payable – interest adjustment (squeeze).

At the time of each instalment of interest.

Debit: Interest payable.

Credit: Bank deposits.

Accounting entries when bonds are repaid.

When calculating the last installment of interest:

Borrow: construction in progress, financial expenses, manufacturing costs, old use, R&D expenditures, etc. (inverted).

Credit: Interest payable.

Bonds payable – interest adjustment (calculated first).

When the principal is repaid at maturity and the last instalment of the bond:

Borrow: Bonds payable – face value.

Interest payable (last interest).

Credit: Bank deposits.

Characteristics of bonds.

1) Profitability means that the principal and interest income of bonds are as stable as those of deposits, and because investors and issuers directly raise funds, there is no intermediary to share profits, so the relative interest rate of bonds is much higher.

2) Security means that the term of repayment of principal and interest has been specified at the time of issuance, and the annual interest rate is generally unchanged, which has nothing to do with the issuer's use of funds and the size of the income. Since there is a strict credit review system at the time of bond issuance, it can ensure the investment income of investors.

3) Liquidity refers to knowing that the first bond can be bought and sold for circulation. Bond featuresWhen bondholders are in urgent need of cash, they can go to the trading venue to sell the bonds.

Bonds are issued by debtors such as enterprises and banks in accordance with legal procedures in order to raise funds and promise creditors to repay principal and interest on a specified date.

Bond is a kind of financial contract, which is issued to investors when financial institutions, industrial and commercial enterprises, etc. directly borrow funds from the society, and at the same time promise to pay interest at a certain interest rate and repay the principal according to the agreed conditions. The essence of a bond is a certificate of debt, which has the force of law. The bond purchaser or investor and the issuer are in a creditor-debt relationship, with the bond issuer being the debtor and the investor (bond buyer) being the creditor.

What are the characteristics of bond investment?

Characteristics of bond investment: high security, higher returns than bank deposits, strong liquidity. Since the bond is issued with an agreement that the principal and interest can be paid after maturity, its income is stable and safe.

Investing in bonds, on the one hand, investors can earn a stable interest income that is higher than bank deposits. Listed bonds have good liquidity. When bondholders are in dire need of funds, they can sell them at any time in the trading market.

Borrow: Bank Deposits 518000 Credit: Bonds Payable - Face Value 500000 Bonds Payable - Interest Adjustments 18000 Present Value of Future Cash Outflows = 518000 = 500000 * (P 500000, i, 3) + 500000 * 6% * P 30000, I, 3-1) + 1] i = Year 1 Borrow:

Finance Expenses 518,000* Bonds Payable - Interest Adjustment Credit: Interest Payable 500,000 * 6% = 30,000 Year 2 Borrow: Finance Expenses (Bonds Payable - Interest Adjustment Credit:

Interest Payable 30,000 Year 3 Borrow: Finance Charges Bonds Payable - Interest Adjustment Credit: Interest Payable 30,000 Borrow:

Bonds payable - face value 500,000 Interest payable 30,000 * 3 = 90,000 Credit: Bank deposit 590,000