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1、,*,出版社 經(jīng)管分社,會(huì)計(jì)英語(yǔ),Chapter 6 Liability,Learning Objectives,1.Definition and types of current liabilities.,2.Account for notes payable and interest expenses.,3.Define loss contingencies and explain their presentation in financial statement.,4.Expain commitment.,5.Definition of long-term liabilities.,6.

2、Definition and types of bonds.,7.Accounting for bonds payable.,8.The present value concept and bond prices,1,6.1 Current Liabilities,6.1.1 Definition and Types of Current Liabilities,A liability is debt borne by an enterprise,measurable by money value,which will be paid to a creditor using assets,or

3、 services,which are generally classified into current liabilities and long-term liabilities.,2,6.1.2 Current Liabilities That Are of Definite Dollar Amount,1Accounts payable,Accounts payable are usually created by a companys economic activities,such as purchases of merchandise and services received

4、in the normal course of business The accounts payable general ledger account is set up to record all credit purchases and separate accounts payable subsidiary ledger accounts are established for each credit seller.,3,2Notes payable,Notes payable are issued whenever bank loans are obtained.Other tran

5、sactions that may give rise to notes payable include the purchase of real estate or costly equipment,the purchase of merchandise,and the substitution of a note for a past-due account payable.,4,6.1.3 Accrued Liabilities,Accrued liabilities arise from the recognition of expenses for which payment wil

6、l be made in a future period.Thus accrued liabilities also are called accrued expenses.Examples of accrued liabilities include interest payable,income taxes payable,and a number of liabilities relating to payrolls.,5,6.1.4 Contingent Liabilities,Contingent liabilities are potential obligations tied

7、to the occurrence of some future event.They can be included with other liabilities on the balance sheet,disclosed in the footnotes to the financial statements or ignored,depending on their materiality and probability of occurrence.,6,6.1.5 The Current Portion of Long-Term Debt,Some long-term debts,s

8、uch as mortgage loans,are payable in a series of monthly or quarterly installments.In these cases,the principal amount due within one year(or the operating cycle)is regarded as a current liability,and the remainder of the obligation is classified as a long-term liability.,7,6.2 Long-term Liabilities

9、,Long-term liability refer to the debts which will be redeemed after a year or an operating cycle longer than a year,including bonds payable,long-term accounts payable,etc.Because bonds are a common form of long-term debt,they will be used to explain the key accounting procedures for long-term liabi

10、lities.,8,6.2.1 The Fundamental Concepts,1)Definition of Bonds,A bond is certificate promising to pay its holder a specified sum of money plus interest at a stated rate.When a corporation issues bonds,it usually incurs two distinct obligations:to pay the face amount of the bonds at a specified matur

11、ity date,and to pay periodic interest at a specified percentage of the face amount.,9,2)Features of Bonds,If you purchase a bond,you will receive a bond certificate.This certificate spells out the terms of agreement between the issuer and the investor.These terms include the denomination of bond,mat

12、urity date,the stated rate of interest,the interest payment terms,and any other agreements made between the borrower and investor.,10,3)Denomination of Bond,Most bonds have a denomination of 1,000 although in recent years 5,000 and 10,000 bonds have become common.The denomination of a bond is often

13、referred to as face value or maturity value.It is always on this amount that the required interest payment is calculated.,11,4)Maturity Date,The date that the principal of bond is paid is called the maturity date Bonds usually mature in from 5 years to more than 30 years from their date of issue.,12

14、,5)Stated Interest Rate and Interest Payment Dates,The stated interest rate of bond is often referred to as nominal interest rate and is specified on the bond at the time it is issued This rate does not change over the life of the bond Most bonds pay interest semiannually,however,the stated interest

15、 rate is an annual rate based on the face value of the bond.,13,6)Other Agreements,Bondholders are unable to vote for corporate management or participate in corporate affairs in the way that stockholders do.Therefore bondholders often insist on written items as part of the bonds agreement.,14,6.2.2

16、Types of Bonds,1)Term Bonds and Serial Bonds,When all bonds of an issue mature at the same time,they are called term bonds.If the maturities are spread over several dates,they are called serial bond.,15,2)Coupon Bonds and Registered Bonds,Coupon bonds are not registered in the name of individual holders but are negotiable by whoever holds them.In order to receive interest payment,the current holders simply clip off a coupon and redeem it at an authorized bank.,16,3)Secured Bonds and Unsecured Bo