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Pengantar Pengantar Akuntansi IIAkuntansi IILONG TERM LIABILITIES – BONDS PAYABLE

Nurul Hidayah, SE,Ak,MSi Hari Setiyawati , SE,Ak,MSi

06FEB

Akuntansi

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Financing Corporations 15-1

A bond is simply a form of an interest-bearing note. Like a note, a bond requires periodic

interest payments, and the face amount must be repaid at

the maturity date.

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15-2

Bonds Payable

A corporation that issues bonds enters into a contract (called a bond indenture or trust indenture) with the bondholders.

Usually, the face value of each bond, called the principal, is Rp1,000,000 or a multiple of Rp1,000,000.

Interest on bonds may be payable annually, semiannually, or quarterly. Most pay interest semiannually.

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When all bonds of an issue mature at the same time, they are called term bonds.

15-2

If the maturity dates are spread over several dates, they are called serial bonds.

Bonds that may be exchanged for other securities are called convertible bonds.

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Bonds issued on the basis of the general credit of the corporation are debenture bonds.

15-2

Bonds that a corporation reserves the right to redeem before their maturity are called callable bonds.

15-2

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15-2

Pricing of Bonds Payable

When a corporation issues bonds, the price that buyers are willing to pay depends upon three factors:1. The face amount of the bonds, which is the

amount due at the maturity date.2. The periodic interest to be paid on the bonds.

This is called the contract rate or the coupon rate.

3. The market or effective rate of interest.

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15-2

The market or effective rate of interest is determined by transactions between buyers and sellers of similar bonds. The market rate of interest is affected by a variety of factors, including:1. investors assessment of current economic

conditions, and2. future expectations.

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17

MARKET RATE = CONTRACT RATE

Selling price of bond = Rp1,000,000

Rp1,000,00010% payable

annually

15-2

If the contract rate equals the market rate of interest, the bonds will sell at their face amount.

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18

MARKET RATE > CONTRACT RATE

Selling price of bond < Rp1,000,000

–Discount

Rp1,000,00010% payable

annually

15-2

If the market rate is higher than the contract rate, the bonds will sell at a discount.

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19

MARKET < CONTRACT RATE

Selling price of bond > Rp1,000,000

+Premium

Rp1,000,00010% payable

annually

15-2

If the market rate is lower than the contract rate, the bonds will sell at a premium.

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15-2

Present Value of 2-Year, 10% Bond

Present value of face value of Rp1,000,000 due in2 years at 10% compounded annually:Rp1,000,000 x 0.82645 (Exhibit 3: n = 2, i = 10%)(Slide 21) Rp 826,450

Present value of 2 annual interest paymentsof 10% compounded annually: Rp100,000 x 1.73554 (Exhibit 4: n = 2, i = 10%)(Slide 23) 173,550

Total present value of bond Rp1,000,000

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Pada tanggal 1 Januari 2012 perusahaan menerbitkan

obligasi Rp100,000,000 12%, jangka waktu obligasi 5 tahun;

bunga obligasi dibayarkan secara 6 bulanan. Tingkat

bunga pasar 12%.

15-3

Bonds Issued at Face Amount

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15-3

Present value of face amount of Rp100,000,000 due in 5 years at 12% compounded annually: Rp100,000,000 x 0.55840 (Exhibit 3: n = 10, i = 6%)

Rp 55,840,000

Present value of 10 interest payments of Rp6,000,000 at 12% compounded semiannually: Rp6,000,000 x 7.36009 (Exhibit 4: n = 10; i = 6%)

44,160,000*

Total present value of bonds Rp100,000,000

*Because the present value tables are rounded to five decimal places, minor rounding differences may appear in this illustration.

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30

15-3

Issued Rp100,000,000

bonds payable at face

amount.

Bonds Payable 100 000 000

Jan. 1 Cash 100 000 0002012

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31

On June 30, an interest payment of Rp6,000,000 is made (Rp100,000,000 x .12 x 6/12).

15-3

June 30 Interest Expense 6 000 000Cash 6 000 000

Paid six months’ interest on

bonds.

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32

The bond matured on December 31, 2011. At this time, the corporation paid

the face amount to the bondholder.

15-3

Cash 100 000 000Paid bond principal at

maturity date.

Dec. 31 Bonds Payable 100 000 0002016

Terima KasihTerima KasihHari Setiyawati dan Nurul H