The following learning objectives for this chapter map to the curriculum design for our online university-level courses. These courses are offered through Utah State University, and result in the awarding of up to 6 hours of highly transferrable college credit. To learn more, check out the classroom link.

 

Long-term notes and present value concepts.

Be able to account for a simple term note payable.

Understand compound interest concepts and calculations.

Define "future value," and know the computations and how to use future value tables (for lump sum and annuity situations).

Define "present value," and know the computations and how to use present value tables (for lump sum and annuity situations).

Calculate and account for amounts related to notes payable that include level payments of principal and interest over their life.

Know that electronic spreadsheets frequently include functions that can be used to calculate note payments.

 

The nature of bonds and related terminology.

Describe the basic characteristics of a bond.

Review and understand bond terminology.

Identify the different types of bonds and their key features.

 

Accounting for bonds payable, whether issued at par, a premium or discount.

What factors will generally impact the issue price of a bond?

Understand why present value is important to bond pricing calculations.

Be able to calculate the issue price for a bond.

Prepare journal entries for the entire life cycle of a bond issued at par.

Be able to describe when a bond is issued at a premium, and prepare journal entries for its issuance.

Use the straight-line method to account for a bond issued at a premium.

Be able to describe when a bond is issued at a discount, and prepare journal entries for its issuance.

Use the straight-line method to account for a bond issued at a discount.

Understand how bonds are presented on a balance sheet, whether issued at par, a premium, or discount.

 

Effective-interest amortization methods.

Use the effective-interest method to account for a bond issued at a premium.

Use the effective-interest method to account for a bond issued at a discount.

 

Bonds issued between interest dates, bond retirements, and fair value measurements.

Determine the appropriate procedures for bonds issued between interest payment dates.

Determine the appropriate year-end accounting for bonds issued at par, a discount, or a premium.

Understand the potential impact of a bond retirement.

 

Analysis, commitments, and leases.

Know how to calculate the debt to total assets and the debt to equity ratios.

Know how to calculate the times interest earned ratio.

Be able to express an understanding of debt analysis, including cautionary caveats.

Differentiate between a liability and a commitment, and understand that significant commitments should be disclosed.

Express a basic level of understanding regarding the accounting for capital leases.