Equity

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Equity


Lecture number:
30
Pages:
2
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Unformatted text preview:

Lecture 30 Outline of Previous Lecture  Section 29: Bonds Cont.  Bond Liability Face Value o Discount Bonds o Premium Bonds o Par Bonds o Maturity Payments o Semiannual Interest Outline of Current Lecture  Section 30: Equity  Common Stock o Shares o Selling common stock with par value shares o Authorizing shares o Earnings/ share Current Lecture  Section 30: Equity  Common Stock o Shares  Common stock – owner’s claim to assets from investment  Retained earnings – owner’s claim to assets from operating the business o 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 capital in excess of par value 9900. o Authorizing shares  Doesn’t cost anything to authorize, can go back to state to get more  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 ACC 221 1st Edition



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