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MU ACC 221 - Equity
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ACC 221 1st Edition Lecture 30Outline of Previous Lecture- Section 29: Bonds Cont.  Bond Liability Face Valueo Discount Bonds o Premium Bondso Par Bondso Maturity Paymentso Semiannual InterestOutline of Current Lecture - Section 30: Equity Common Stocko Shareso Selling common stock with par value shareso Authorizing shareso Earnings/ shareCurrent Lecture- Section 30: Equity Common Stocko Shares Common stock – owner’s claim to assets from investment Retained earnings – owner’s claim to assets from operating the businesso Selling common stock with par value shares Par value – no real meaning, adding a value amount to shares- Most companies assign a very low value to stock, because they do not want the market value to be below their par value so they do not have to sell. - Legally required to record par value into common stock $1 par value/ share, selling for $100/ share, selling 100 shares- Dr. cash 10000, Cr common stock (100 shares x $1) = 100, Cr. Paid in capitalin excess of par value 9900. o Authorizing shares Doesn’t cost anything to authorize, can go back to state to get moreThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Larger shares you get, less often you have to go get more and do paperwork- Sell 10000 shares of stock in 2000 increments - When in shareholders hand, considered outstanding Treasury stock – company buying back their stock (excess money)- Not unissued, just brought back into company- Outstanding = total issued – bought back = 8000o Earnings/ share Net income / outstanding shares of stock  Outstanding shares tells how to pay a dividend- Common stock (1 million) = 10000 issues- Treasury 2000  not given shares outstanding on any financial records Buy back 2000 shares- Dr. treasury stock 20000, Cr. Cash 20000 Treasury is a contra equity account- Normal balance in debits, - Appears on balance sheet as


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MU ACC 221 - Equity

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