I. Entry of bond issuance
1. Complete accounting entries for issuing bonds
Debit: Bank deposit (actually received)
Bonds payable-interest adjustment (reverse extrusion, loanable)
Loans: bonds payable-face value
Note: The issuance cost of issuing bonds should be included in the initial cost of issuing bonds and reflected in the detailed account of "bonds payable-interest adjustment".
2. Confirm the accounting entries of interest payable.
Loans: construction in progress/manufacturing expenses/financial expenses /R&D expenses, etc.
Loan: interest payable
Bonds Payable-Interest Adjustment (Reverse Extrusion)
When interest is paid in each installment,
Borrow: interest payable
Loans: bank deposits
3. Accounting entries when bonds are repaid
When calculating the interest of the last installment:
Borrow: construction in progress/financial expenses/manufacturing expenses /R&D expenses, etc. (reverse extrusion)
Loan: interest payable
Bonds Payable-Interest Adjustment (Calculate First)
When the bond repays the principal and the last installment at maturity:
Debit: bonds payable-face value
Interest payable (last interest)
Loans: bank deposits
Second, the characteristics of bonds
1, profitability means that the principal and interest income of bonds are as stable as deposits, and the relative interest rate of bonds is much higher because investors and issuers directly finance and there is no intermediary profit sharing.
2. Security means that the time limit for repayment of principal and interest has been stipulated at the time of bond issuance. Under normal circumstances, the annual interest rate is also constant, regardless of the issuer's capital use and income. Because there is a strict credit review system when bonds are issued, investors' investment income can be guaranteed.
3. Liquidity means that bonds can be traded and circulated. Characteristics of bonds When bondholders are in urgent need of cash, they can sell bonds in trading places.
Bonds are securities issued by debtors such as governments, enterprises and banks in accordance with legal procedures in order to raise funds and promise creditors to repay the principal and interest on a specified date.
Bond is a kind of financial contract, which is a creditor's right and debt certificate issued to investors when the government, financial institutions and industrial and commercial enterprises directly borrow money from the society and 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 legal effect. There is a creditor-debtor relationship between bond buyers or investors and issuers. Bond issuers are debtors and investors (bond buyers) are creditors.