[jeff]

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

Agreed!! From a work perspective (short month to close out) and from a studying perspective (would have loved a test on the 31st)

[Anonymous]

Agreed!! From a work perspective (short month to close out) and from a studying perspective (would have loved a test on the 31st)

[Amay]

I need at least one more week…but oh well. I am honestly done stressing and at this point we just have to be confident and keep reviewing what we know. Remember…? WE GOT THIS!!

On another note, can someone please help me clarify this?

Bond interest expense = net carrying value of bond x effective interest rate = amortization of bond discount or premium (?)

Bond interest paid at bond issuance (debit cash credit interest expense payable)= face value of bond x stated rate (?) x period interest has accrued which is period from the date of the bond to the issuance of the bond?

Thanks!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

I need at least one more week…but oh well. I am honestly done stressing and at this point we just have to be confident and keep reviewing what we know. Remember…? WE GOT THIS!!

On another note, can someone please help me clarify this?

Bond interest expense = net carrying value of bond x effective interest rate = amortization of bond discount or premium (?)

Bond interest paid at bond issuance (debit cash credit interest expense payable)= face value of bond x stated rate (?) x period interest has accrued which is period from the date of the bond to the issuance of the bond?

Thanks!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Anonymous]

Study the amortization tables and try to create one from scratch for both premiums and discounts. It really helped me understand how interest played a role in the process. Just remember when you have a PREMIUM you DEDUCT the amortized amount to get back DOWN to the carrying value at the end of the maturity and when you have a DISCOUNT you ADD the amortized amount to get back UP to the carrying value at the end of the maturity.

[Anonymous]

Study the amortization tables and try to create one from scratch for both premiums and discounts. It really helped me understand how interest played a role in the process. Just remember when you have a PREMIUM you DEDUCT the amortized amount to get back DOWN to the carrying value at the end of the maturity and when you have a DISCOUNT you ADD the amortized amount to get back UP to the carrying value at the end of the maturity.

[Anonymous]

Hey NYC. What's up Man! I've been waiting for you.

Please explain this to us per GASB 65. I almost got crucified here for not being able to explain this PRODIGALS mnemonic that I created. These are Deferred Outflows Of Resources [DOOR] and Deferred Inflows Of Resources [DIOR]under the basic structure of GF-BS.

I had not seen this early on since I have been using 2012 FAR materials. Then today, I was surprised to see these DOOR/DIOR in 2013 FAR review materials.

Other DOOR/DIOR

[Deferred Outflows of Resources

/Deferred Inflows of Resources]:

PRODIGALS:

P – Pension > Certain Changes in Net Pension Liabilities

R – Refunding of Debt

O – Operations > Regulated Operations

D – Debt Issuance Cost

I – Imposed Non-exchange Revenue Transactions; Intra-Entity Transfers of future revenues

G – Government-mandated non-exchange transactions & voluntary non-exchange transactions

A – Assets associated with unavailable revenues

L – Leases

S – Sales of future revenues

[Anonymous]

Hey NYC. What's up Man! I've been waiting for you.

Please explain this to us per GASB 65. I almost got crucified here for not being able to explain this PRODIGALS mnemonic that I created. These are Deferred Outflows Of Resources [DOOR] and Deferred Inflows Of Resources [DIOR]under the basic structure of GF-BS.

I had not seen this early on since I have been using 2012 FAR materials. Then today, I was surprised to see these DOOR/DIOR in 2013 FAR review materials.

Other DOOR/DIOR

[Deferred Outflows of Resources

/Deferred Inflows of Resources]:

PRODIGALS:

P – Pension > Certain Changes in Net Pension Liabilities

R – Refunding of Debt

O – Operations > Regulated Operations

D – Debt Issuance Cost

I – Imposed Non-exchange Revenue Transactions; Intra-Entity Transfers of future revenues

G – Government-mandated non-exchange transactions & voluntary non-exchange transactions

A – Assets associated with unavailable revenues

L – Leases

S – Sales of future revenues

[NYCaccountant]

Bond Interest expense is the carrying amount of bond * the effective interest rate. The difference between Interest expense and actual cash paid is in the amortization. This is the effective interest method (if memory serves me correctly). Example below:

Initial sale of bond:

Cash Debit – 10,000

Bond payable Credit – 12,000

Discount – Debit 2,000

Over the time, that 2,000 difference will be allocated to interest expense. So in the big scheme of things, If I wanted to book this at maturity, I'll simply do this:

Interest expense – debit 2,000

Discount – credit 2,000

Say the interest for the period was 2,000, but the actual interest expense was 3,000. The difference is the discount being amortized to interest expense.

Interest expense Debit – 3,000

Cash – Credit 2,000

Discount – Credit 1,000

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

Bond Interest expense is the carrying amount of bond * the effective interest rate. The difference between Interest expense and actual cash paid is in the amortization. This is the effective interest method (if memory serves me correctly). Example below:

Initial sale of bond:

Cash Debit – 10,000

Bond payable Credit – 12,000

Discount – Debit 2,000

Over the time, that 2,000 difference will be allocated to interest expense. So in the big scheme of things, If I wanted to book this at maturity, I'll simply do this:

Interest expense – debit 2,000

Discount – credit 2,000

Say the interest for the period was 2,000, but the actual interest expense was 3,000. The difference is the discount being amortized to interest expense.

Interest expense Debit – 3,000

Cash – Credit 2,000

Discount – Credit 1,000

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Amay]

Thanks @cpamom I understand that concept just wanted to confirm that my formulas were correct. Based on my amort. table NCV X effect. rate gets subtracted from the “check amount” (face X coupon rate) to arrive at the amortization amount.

I mistakenly wrote on my last post that interest exp = amortization amount when in reality they are different amounts in the table. The interest expense (NCV X effect. rate) helps INCREASE your bond DISCOUNT in order to go UP to the face value while it helps DECREASE your bond PREMIUM to work its way DOWN to the face value.

I think I've got it!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

Thanks @cpamom I understand that concept just wanted to confirm that my formulas were correct. Based on my amort. table NCV X effect. rate gets subtracted from the “check amount” (face X coupon rate) to arrive at the amortization amount.

I mistakenly wrote on my last post that interest exp = amortization amount when in reality they are different amounts in the table. The interest expense (NCV X effect. rate) helps INCREASE your bond DISCOUNT in order to go UP to the face value while it helps DECREASE your bond PREMIUM to work its way DOWN to the face value.

I think I've got it!

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[jasonrobbins]

^^^

To add to that, if you have a premium bond, your interest expense will always be LESS than your coupon payments.

If you have a discounted bond, your interest expense will always be MORE than your coupon payments

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

^^^

To add to that, if you have a premium bond, your interest expense will always be LESS than your coupon payments.

If you have a discounted bond, your interest expense will always be MORE than your coupon payments

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[Amay]

Or what NYC said….I am so glad I don't have to write an essay on this. LOL

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Author]

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