Bonds: Long-term Liabilities

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IE code:
CF2-105-I-M
Language: English
also available in Spanish
Format:
Multimedia
Est. dedication time:
40 minutes
Academic Area:
Type of publication:
Technical Note

Instructor support

A Teaching Note is available for this material.

Bonds, Depreciation schedules, Journal entries, Time value of money

Description

This tutorial contemplates the use of bonds as financial instruments. Through the use of a depreciation calculator and a practical case example students will analyze depreciation schedules and journal entries in order to better understand this financing option.

This tutorial is separated into four sections:

- a photo example of a bond certificate detailing the important elements
- a test with multiple choice questions reflecting upon both the time value of money and bond theory
- a bond calculator allowing for the calculation of bond depreciation schedules and associated journal entries
- a focus on bonds from the investor&rsquos perspective rather than that of the issuer

This case has been used successfully in undergraduate, graduate (MBA programs and Master in Management programs) and executive education level in courses such as Financial Accounting and Financial Reporting and Analysis. The interactive tutorial is designed for independent study. It can be assigned as reading material before a session on Accounting for Long-Term Liabilities or Accounting for Bonds.

Author's comments

While developing this multimedia material I was concerned about the complexity of the accounting registrations involved. However the possibility of pursuing a multimedia environment allows the student to focus on the principle without getting lost in technicalities. In this way the availability of this documentation facilitates the teaching of accounting for bonds.