Lecture 6: Owner's Equity Accounting â Inter Company Accounting ...
Lecture 6: Owner’s Equity Accounting – Inter Company Accounting Types of investments and accounting methods:
Different types of accounting methods are used for different investments The different methods are related to the size of the investment and how long it is to be held
Investments in debt securities:
Bonds are a form of debt security o May be classified as ‘held to maturity’ if the company has the ability and intention to hold them until maturity Bonds may be issued at par, at a discount or at a premium When held to maturity, bonds are purchased at par Bonds are generally non-current assets (held for longer than 1 year)
There are two additional recording implications for the remainder f the life of the bonds: o Recording interest earned:
Different types of accounting methods are used for different investments The different methods are related to the size of the investment and how long it is to be held
Investments in debt securities:
Bonds are a form of debt security o May be classified as ‘held to maturity’ if the company has the ability and intention to hold them until maturity Bonds may be issued at par, at a discount or at a premium When held to maturity, bonds are purchased at par Bonds are generally non-current assets (held for longer than 1 year)
There are two additional recording implications for the remainder f the life of the bonds: o Recording interest earned:
