[CPA = Continuous Pain & Agony]

5 days to go and I still don’t understand bonds. Hated them in college, hate them now, will forever hate them. Convertible bonds, detachable and nondetachable warrants, stated rate and market rate, premium vs discount, blah blah blah!!!

If I am comfortable in all other areas of FAR (maybe with the exception of diluted EPS), will I be okay going into this exam without understanding bonds?

Can anyone share any pointers on how to understand bonds? Also, how difficult are the real exam questions compared to Becker’s insanely worded bond MCQ’s?

Thanks in advance!

B - 80 (10/06/11)
A - 84 (01/03/12)
R - 81 (02/16/12)
F - 82 (11/23/11)

Thank you Jesus!

Used Becker Self-Study

[ScruffMcGruff]

I think your biggest problem will be this: If you have everything else nailed down except bonds and you do well on those MC questions, you're going to get harder questions on your 2nd and 3rd testlets. Once you get to those, the bond questions will get harder and harder, and you will likely get more of them in those two testlets.

Anyhow, you can definitely still pass without knowing how to do the complex bond problems, but you should at least be able to know how to do the simple bond calculation problems. The simple bond questions like ‘Bond is selling at 107 with a 5% coupon rate.. blah blah blah.. What is the selling price of the bond?'. Those questions you should know how to do. The ones that ask you to basically make a bond schedule to determine the price/int exp/ect so many periods/payments in… Those ones can be tough and if you don't have enough time to put a good effort into them, I would say just skip them and pray you don't get too many of them on the test.

AUD - 85
FAR - 78 (lol@ FAR Sims)
REG - 85
BEC - August

[Anonymous]

The key to bonds to keep practicing until you know it in your sleep. I took FAR back in April and still remember how to do it. I will never forget it. Once you see the big picture, it will all make sense and you will remember it for the rest of your life.

[CPA = Continuous Pain & Agony]

Thanks for all of the comments. To speak a little to Valueofnothing: It isn't that I don't get the concepts of bonds. I understand discounts and premiums, effective interest method vs SL method, and the basic journal entries. The part that is so frustrating is doing these Becker MCQ's that are so freaking wordy and confusing. If I gave you ten current CPA's that had been practicing for 10 years or longer, I bet only one or two would know how to do these calculations without having to look it up. As is the case for MOST accounting topics, CPA's usually have to look up the more difficult topics when applying in the real world.

I understand leases fairly well and get the basics of bonds, so with that I am hoping to get heavily tested on other areas such as Govt, Deferred Taxes, Inventory, and NFP's.

Thanks to everyone else for the encouraging words and advice!

B - 80 (10/06/11)
A - 84 (01/03/12)
R - 81 (02/16/12)
F - 82 (11/23/11)

Thank you Jesus!

Used Becker Self-Study

[nnenna]

u r correct but the most impt part of passing bonds is know how the effective method.is done ..simple

…cindy of yaeger is the best for bonds………….get a hand on her lecture and u will get it she has it down to tee like no other teacher i know ………….yr passing may depend on it……………..u must know bonds and its sister lease or dont bother sitting for the exam…!!!!!!!!!!!!!!!!!!!!!!!!!!

[NoScores2Display4thisSection]

dont worry too much about the very, very hard bond questions

if you're using Becker, try the AICPA released simulation on bonds (I forget which year it's under) where it has a table and has you fill in the interest rate yield, etc and calculate the carrying value of the bond at a particular date. This is best way. If you can calculate the CV as of a certain date with the sometimes limited information they give you in a problem, you'll be in great shape with bonds on exam day!

done

[nnenna]

i agree just the basics of bond will do………..to pass the exam

[mrcpa]

try to youtube some bond videos to help get an understanding

Licensed - 2012

[Anonymous]

@ Continous Pain & Agony

lol! I sooo went through exactly what you are going through!! I studied so so hard and nailed everything else but just 6 days before the exam i just started totally freaking out re: bonds! I even went home and told my husband that I totally didnt understand bonds…..I had studied them before and thought I was doing ok, but after some really challenging MCQs i just started trippin' – needless to say, my whole exam was packed….and I mean PACKED with bonds….so everything else that I had studied and totally nailed? – out the window!! – am still trying to get over that, coz I had really put in some time, but one topic was my undoing.

So, to answer your question? – yes, you need to know ALL topics at least to some comfortable level and if you can Nail the other topics too; then all the better for you.

FAR: 66

REG: 71

AUD: 57

[Anonymous]

Obviously I can't give details… but I had quite a few questions on bonds on my test a couple weeks ago… so I would def keep drilling the bond MCQs and sims.

[CPA = Continuous Pain & Agony]

Thanks for the advice C.K. and acctnt_shan! Over the last four days (total of ~30 hours studying and MCQ's), the light bulb finally came on for bonds! I can do them in my sleep now. Same thing happened for Dilutive EPS last night; it just all of a sudden clicked, finally!

I take the exam tomorrow at 12:30. Took Becker Exam 2 this morning and was disappointed. After conquering bonds and EPS I felt I would surely score over 75 on the practice test…nope! Got 63% of the MCQ's right and a little better than that on the sims.

Becker's Exam 2 is one tricky piece of crap. Even though I didn't score where I thought I would, I still feel fairly confident about tomorrow. I went through the practice test afterward and made notes on all the questions I missed. I think my weakest areas now are the net asset changes in “PUT” on the NFP statement of activities, and just trying to remember all of the subtle differences with IFRS.

Please say a pray for me tomorrow afternoon. I have a wife, a six year old son, and a four year old son that will be very disappointed if I have to extend this six month process by even a week. The thought of having to study all of this material again makes me extremely nauseuous.

Come on seven five! I'll take three in a row to end this suffering!

B - 80 (10/06/11)
A - 84 (01/03/12)
R - 81 (02/16/12)
F - 82 (11/23/11)

Thank you Jesus!

Used Becker Self-Study

[Marivy22]

Praying for you….take few minutes to go over mnemonicas like SIRAGE, GRASPP SE PAPI and things like that. I missed FAR for one point and I am sure it was for some of those easy to forget things….

Done 😉
Class of 2012!!!!
Lots of prayers and hard work....

[mrcpa]

and BAE BAE

Licensed - 2012

[hardworker]

Ok, this might be kind of stupid for me to ask but…here it goes! Honestly, I just dont understand the vocabulary in bond questions. For example: I thought when they say company A “issued” blah blah blah, that issued means they borrowed. But Ive seen some questions that “issued” means they provided, so they would have a debit in cash because they received cash from a bond they issued. Im just so confused. First of all because the original definition of issuance means providing, which it makes sense that you would receive cash in return, but issuance also means borrowing??? Can someone please clarify this for me? There is no way I'll ever answer these bond questions right if I dont understand the terminology. Let me just say that english is not my first language by the way.

[jenuno01]

@hardworker – What is your first language?

In simple terms, when a bond is “issued” this in essence means a company “borrows” money from the investors. The Issuing company or borrower, pays interest to the bond holders (investors), until the bond matures. When the bond matures, bond holders get their investment plus interest back.

Class of 2012

[Anonymous]

@hardworker…if you issued bonds, means you are borrowing money, which means you receive it as well. For example, I issued $1,000 of bond to you for $900, with interest rate 10%. On the issurance day, I will received $900 from you, so I will record cash (as increase in asset) and an IOU/Bond Payable (as increase in liability): Dr: Cash: 900, Cr: Bond Payable: 900.

[Author]

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