[smaccyl]

Bonds are causing me anxiety, really, I thought I could breeze through it like in school five years ago, I thought I understood them, I guess not. My exam is in 6 weeks and I still have half the material to cover, I just don’t want to spend too much time on bonds on not have time to go through the rest.

[Determined CPA]

Bonds are very important so you do not want to sit for the exam without having a good understanding of them. However, if it is causing you anxiety then I suggest moving on for now because the anxiety will likely prevent you from being able to learn it anyway. You will be focusing on the amount of time you've spent on bonds and the fact that you aren't absorbing the information they way you want to. You still need to spend a solid amount of time on governmental and NFP so I think it's best to move along and cover the rest of the material. Maybe include bonds in your progress tests though so you don't lose whatever information you already know. Plus, you'd be surprised with how much you retain from the questions alone. So yes, my advice is move on, however keep bonds in your progress tests and definitely become familiar with them before exam day. Best of luck!

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[Skynet]

You want to study Bonds with Leases together. A lot of it is interrelated, but will really help you understand the concept.

[12tang]

You have a lot of time. No worries! Just make sure you allow an adequate review window. I'd say about 1.5 – 2 weeks. Stuck on something from bonds, post it on here! We'll help ya out. Just keep moving with the flow of information so you don't get behind.. It all comes together in the review phase..

Using Becker self-study
FAR: (82) 175 hours - 1st attempt
BEC: (XX)
AUD: (69) 45hrs of study - 1st attempt
REG: (XX)

[Anonymous]

What exactly don't you understand in bonds? Post your questions, and we will help

[Anonymous]

I would study bonds with leases as mentioned above and I highly recommend Roger CPA study videos below (found on youtube) he is very thorough and really gets the detail across to you.

https://www.youtube.com/watch?v=jvSCBrLzY8o Bond Terminology

https://www.youtube.com/watch?v=JDQD_G8afoU Bond Issuance Examples

https://www.youtube.com/watch?v=i7cX3xGo_wM Calc Bond Issuance Proceeds

https://www.youtube.com/watch?v=8iaoN3axbo8 Present Value tables

https://www.youtube.com/watch?v=nXPJa3HJ22w Present Value tables

https://www.youtube.com/watch?v=3uRcOZaEsqU Journal Entries #1

https://www.youtube.com/watch?v=rI69_DllKAA Journal Entries #2

https://www.youtube.com/watch?v=4cOekDD9oeg Journal Entries #3

https://www.youtube.com/watch?v=QPL8Z3NFsN4 Bond Retirements

https://www.youtube.com/watch?v=xWofWVfZntU Class questions

[Anonymous]

My personal advice:

Learn bonds now. The longer you go putting it off, the more you will build it up in your head as this impossible concept that you just won't ever get.

The key with bonds is always going to be the Earned Amortization Schedule. Once you can visualize it and recreate one without resorting to notes you will be in good shape. The most important thing will be to watch the dates because they almost never have a bond start on January 1 and end on December 31.

[smaccyl]

Thank you guys for your encouragement, I feel better this morning, I think I was disappointed in myself yesterday because I used to understand bonds and I was looking forward to studying them. This is not my first run with FAR, I took the exam 5 years ago and bonds were one of my strongest areas, I don't remember having this much trouble with them.

2ndgoround, thank you for taking the time to post the videos. I think I understand the concept in general, I also understand the amortization table, but I mix everything up when it comes to answering MCQs and doing calculations. I just need to spend a little more time, If I remember correctly, the amortization table has all the answers so I should be preparing one when I solve problems.

An example of things I am confused with: when to used the effective rate, the yield rate and the market rate.

[12tang]

@smaccyl – The yield is the same as the market rate, it's just another name for it. Think of it like, what is the market currently yielding..

The stated rate, which is the rate that is on the bond is my step number 1. You use this to find the payment of cash that MUST be paid. Stated rate multiply by face value = payment in cash.

Step number 2: Now we need to know our interest expense, which will be found by taking your yield or market rate, multiplied by the carrying value of the bond, which could be higher, lower or on par with the face value. J/E:

DR: interest expense xx

DR: bond premium xx (if stated is higher than market)

CR: bond discount xx(if stated is lower than market)

CR: Cash xx

Interest expense minus the cash paid will give difference. Take the difference and if the bonds carrying value is less than par, add that difference to the carrying value so you can work towards the face value. if the bonds carrying value is more than the face amount, then subtract to again, work towards the face value.

They will tell you whether or not the effective interest method is used vs the straight-line.

Using Becker self-study
FAR: (82) 175 hours - 1st attempt
BEC: (XX)
AUD: (69) 45hrs of study - 1st attempt
REG: (XX)

[Author]

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