Non-Current Liabilities (Bonds Payable)

Issuing bonds:
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1− 𝐹𝑉
(1 + 𝑖)𝑛
𝑃𝑉 = [ 𝑥 𝐶] + ; 𝐶 = 𝑐 𝑥 𝐹𝑉
𝑖 (1 + 𝑖)𝑛

FV = face value/par value/principal

c = coupon rate/stated rate/nominal rate
i = market rate/effective yield

Journal entries:
At Par At Discount At Premium
c=i c<i c>i
Dr. Cash Dr. Cash Dr. Cash
Issuance
Cr. Bonds payable Cr. Bonds payable Cr. Bonds payable
Dr. Interest expense Dr. Interest expense
To record interest Dr. Interest expense
Cr. Bonds payable Dr. Bonds payable
payment Cr. Cash
Cr. Cash Cr. Cash
Dr. Interest expense Dr. Interest expense
Dr. Interest expense
Cr. Bonds payable Dr. Bonds payable
Cr. Interest payable
To record accrued Cr. Interest payable Cr. Interest payable
interest and its payment
Dr. Interest payable
Dr. Interest payable Dr. Interest payable
Cr. Cash
Cr. Cash Cr. Cash

Bonds issued between interest dates:

At Par At Discount At Premium
c=i c<i c>i
Dr. Cash Dr. Cash Dr. Cash
Issuance
Cr. Bonds payable Cr. Bonds payable Cr. Bonds payable
To record accrued
interest received
Dr. Cash Dr. Cash Dr. Cash
(kita bayarin dulu Cr. Interest expense Cr. Interest expense Cr. Interest expense
interestnya, agar saat
interest dates full)
To record interest Dr. Interest expense Dr. Interest expense Dr. Interest expense
payment Cr. Cash Cr. Cash Cr. Cash
To record discount or Dr. Interest expense Dr. Bonds payable
premium amortization Cr. Bonds payable Cr. Interest expense

Bonds extinguishment:
 Always amortized discount or premium up to the reaquisition date
 If reaquisition price > net carrying amount = loss (harus membayar lebih)
 If reaquisition price < net carrying amount = gain

At Discount At Premium
Dr. Interest expense Dr. Interest expense
Cr. Bonds payable Dr. Bonds payable
Cr. Cash Cr. Cash
Dr. Bonds payable Dr. Bonds payable
Dr. Loss on extinguishment Dr. Loss on extinguishment
Cr. Gain on extinguishment Cr. Gain on extinguishment
Cr. Cash Cr. Cash
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Extinguishment by exchange assets:
1. Gain or loss on disposition of assets  compare FV and CA of asset
 If FV > CA = Gain
 If FV < CA = Loss

2. Gain or loss of extinguishment of debt  compare FV of asset and CA of bonds (+ accrued interest)
 If FV > CA++ = Loss
 If FV < CA++ = Gain

Journal:
Dr. Notes payable
Dr. Loss on disposition of assets
Dr. Loss on extinguishment
Cr. Asset
Cr. Gain on disposition of assets
Cr. Gain on extinguishment

Extinguishment with modified of terms:

Dr. Notes payable (old)
Dr. Interest payable
Dr. Loss on extinguishment
Cr. Notes payable (new)
Cr. Gain on extinguishment

Fair value option:

Dr. Bonds payable
Cr. Unrealized holding gain or loss – income

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Equity
Issuance of shares:
Dr. Cash
Cr. Share capital – ordinary/preference (at par)
Cr. Share premium – ordinary/preference

Reaquisition of shares:
1. Cost method : sesuai uang yang dibayarkan untuk membeli kembali saham,
disajikan sebagai pengurang ekuitas
2. Par/stated method : sesuai dengan par value
selisih masuk ke premium
disajikan dibawah share yang ada
Journal:
Dr. Trasury shares
Cr. Cash

Sale of treasury shares:

Above cost Below cost
(SP > cost) (SP < cost)
Dr. Cash Dr. Cash
Cr. Treasury shares (at par) Dr. Share premium – treasury
Cr. Share premium – treasury Cr. Treasury shares (at par)
*jika share premium – treasury tidak mencukupi maka masuk ke Retained Earnings

Share split:
Stock split 2 for 1 Reverse stock split 1 for 2
Par ↓ Par ↑
Outstanding ↑ Outstanding ↓

Journal: No entry Journal: No entry

Dividend:
At declaration date At recording date At payment date
Dr. RE Dr. Dividend payable
Cash No entry
Cr. Dividend payable Cr. RE
Dr. RE
Dr. Share dividend distributable
Share Cr. Share dividend distributable No entry
Cr. Share capital – odinary
Cr. Share premium – ordinary

Lumpsum issuance:
Incremental method Proportional method
1 FV is needed 2 FV is needed
FV of ordinary
FV of preference
Lumpsum receipt
Aggregate FV
Allocated to (known FV)
Remainder to (unknown FV)
Allocate to ordinary = % total x lumpsum receipt
Allocate to preference = % total x lumpsum receipt
Dr. Cash Dr. Cash
Cr. Share capital – ordinary (at par) Cr. Share capital – ordinary (at par)
Cr. Share premium – ordinary Cr. Share premium – ordinary
Cr. Share capital – preference (at par) Cr. Share capital – preference (at par)
Cr. Share premium – preference Cr. Share premium – preference
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Dilutive Securities: sekuritas yang dapat diubah menjadi saham biasa (mengurangi EPS)
1. Convertible bonds
a. Liability component
b. Equity component

Issuance:
Dr. Cash
Cr. Bonds payable*
Cr. Share premium – conversion equity**

* (FV liability component = PV bonds)

** (FV liability component = FV convertible debt – FV liability component)

Settlement
Repurchase at maturity:
Dr. Bonds payable*
Cr. Cash*

*sebesar principle
Conversion of bonds at maturity:
Dr. Bonds payable (principle karena at maturity date)
Dr. Share premium – conversion equity (offset all karena diconvert)
Cr. Share capital – ordinary
Cr. Share premium – ordinary
Conversion of bonds before maturity:
Dr. Bonds payable (CA/ BV at the date of conversion)
Dr. Share premium – conversion equity (offset all karena diconvert)
Cr. Share capital – ordinary
Cr. Share premium – ordinary
Repurchase before maturity:
Dr. Bonds payable (CA/ BV at the date of repurchase)
Dr. Share premium – conversion equity (FV convertible debt – FV liability component)
Dr. Loss on repurchase of conversion bonds (FV liability component – CA liability component)
Cr. Gain on repurchase of conversion bonds (FV liability component – CA liability component)
Cr. Cash (cash proceed)

FV liability component > CA liability component = Loss

FV liability component < CA liability component = Gain

2. Convertible preference shares

Issuance:
Dr. Cash
Cr. Share capital – preference
Cr. Share premium – conversion equity
Repurchased:
Dr. Share capital – preference
Dr. Share premium – conversion equity
Dr. Retained earnings
Cr. Cash
Convert at maturity:
Dr. Share capital – preference
Dr. Share premium – conversion equity
Cr. Share capital – ordinary
Cr. Share premium – ordinary
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3. Share option plans
At the date of grant:
No entry
To record compensation expense:
Dr. Compensation expense
Cr. Share premium – share options
Exercise:
Dr. Cash (shares x option price)
Dr. Share premium – share options (% exercise x compensation expense)
Cr. Share capital – ordinary
Cr. Share premium – ordinary
Expiration:
Dr. Share premium – share options*
Cr. Share premium – expired share options*

*(% expired/ yang tidak diexercise x compensation expense)

4. Share warrants
Issuance:
Dr. Cash (cash receipt)
Cr. Bonds payable (PV bonds)
Share premium – share warrants
Exercise:
Dr. Cash
Dr. Share premium – share warrants
Cr. Share capital – ordinary
Cr. Share premium – ordinary
Expiration:
Dr. Share premium – share warrants
Cr. Share premium – expired share warrants

5. Restricted shares
At the date of grant:
Dr. Unearned compensation
Cr. Share capital – ordinary
Cr. Share premium – ordinary
To record compensation expense:
Dr. Compensation expense
Cr. Unearned compensation

Dr. Share capital – ordinary

Dr. Share premium – ordinary
Cr. Compensation expense
Cr. Unearned compensation

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EPS
Basic EPS:
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠
𝐵𝑎𝑠𝑖𝑐 𝐸𝑃𝑆 =
𝑊𝐴𝑆𝑂

WASO:
Dates outstanding Shares outstanding Restatement Fraction of year Weighted shares
(ketika ada share
(shares kumulatif) dividends atau
share splits)

Diluted EPS: bagaimana EPS jika ada dillutive securities yang di-exercise

𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑓𝑒𝑟𝑒𝑑 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑠 ± 𝐷𝑖𝑙𝑙𝑢𝑡𝑖𝑣𝑒 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑒𝑓𝑓𝑒𝑐𝑡𝑠

𝐷𝑖𝑙𝑢𝑡𝑒𝑑 𝐸𝑃𝑆 =
𝑊𝐴𝑆𝑂 ± 𝐷𝑖𝑙𝑙𝑢𝑡𝑖𝑣𝑒 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑒𝑓𝑓𝑒𝑐𝑡𝑠

Antidilutive securities: sekuritas yang apabila di-exercise maka akan menaikkan EPS  tidak dilaporkan

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Debt & Equity Investment
1. Debt
Transaction
a. HTM : held to maturity Amortised cost costs are not
b. L & R : doesn’t have quote price in active market expense
c. AFS : available for sale, changes in FV to equity (OCI) Fair value
d. FVTPL : trading, changes in FV to income (L/R)
 Derivative (convertible bonds, prefference shares, warrants, options)
 Transaction costs are expensed  tidak dikapitalisasi

Bonds purchase:
Dr. Debt investment
Cr. Cash
Interest received/ accrued interest:
Dr. Cash/ Interest receivable
Dr. Debt investment (at discount)
Cr. Debt investment (at premium)
Cr. Interest revenue
Bonds sell:
Dr. Cash (cash proceed)
Dr. Loss on sale
Cr. Gain on sale
Cr. Debt investment
Cr. Interest revenue (accrued interest)

Cash proceed > BV = Gain

Cash proceed < BV = Loss
Adjustment:
FV > BV = Gain
Dr. Securities FV adjustment
Cr. UHG/ UHL – income

FV < BV = Loss
Dr. UHG/ UHL – income
Cr. Securities FV adjustment

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 2. Equity
Control
a. Yes : 50% PSAK 65: Consolidate
b. No : significant influence
 Yes : 20 – 50%  PSAK 11: Equity method (accounting for investment)
 No : < 20%  PSAK 55
o AFS : changes in FV to equity Fair value
o FVTPL : changes in FV to income

FV method Equity method

Dr. Equity investment Dr. Equity investment
Cr. Cash Cr. Cash
Equity purchase
or or
Dr. Investment in Dr. Investment in
Cr. Cash Cr. Cash
Dr. Equity investment
Cr. Revenue from investement

Dr. Loss on investment

Net income/ loss
Cr. Equity investment
No entry
or
Dr. Investment in
Cr. Income from

Dr. Loss from

Cr. Investment in
Dr. Cash
Cr. Equity investment
Dr. Cash
Dividend
Cr. Dividend revenue or
Dr. Cash
Cr. Investment in

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Leases (Lessee)
1. Finance lease: mengalihkan seluruh resiko dan manfaat, mengakui aset, ada interest dan depreciation
Kriteria:
 Mengalihkan kepemilikan aset
 Lessee mempunyai opsi untuk membeli (bargain purchase option)
 Masa sewa adalah untuk sebagian besar umu ekonomis aset (75%)
 Nilai kini dari jumlah pembayaran sewa minimum secara substansial mendekati nilai wajar aset
sewaan (PV MLP ≈ FV) (90%)
 Rugi lessor terkait dengan pembatalan oleh lessee ditanggung oleh lessee
 Laba rugi dari fluktuasi nilai wajar residu dibebankan kepada lessee
 Lesse memiliki kemampuan untuk melanjutkan sewa

Minimum Lease Payment (MLP)

Include:
o Minimum rental payments
o Guaranteed residual value
o Penalty for failure to renew or extend the lease
o Bargain purchase option
Not include:
o Executory costs (insurance, maintanance, taxes)

Journal:
Dr. Leased equipment
Cr. Lease liability

2. Operating lease: tidak mengalihkan seluruh resiko dan manfaat, tidak mengakui aset
Journal:
Dr. Rent expense
Cr. Cash

Rent expense > cash = Rent liability

Rent expense < cash = Prepaid rent

Things to note:
a. Asset dan liability dicatat pada nilai terendah dari PV MPL atau FV
b. Depreciation period
 Kriteria 1,2 = economic life
 Kriteria 3,4 = lease term
c. Discount rate
 Implicit interest rate of lessor (known by lessee)
 Incremental borrowing rate
d. Unguaranteed residual value = no residual value

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Leases (Lessor)
1. Finance lease
a. Direct – finance (doesn’t involve profit*)
Lease receivable:
 PV MPL
 Unguaranteed residual value
 Deduct by executory cost, only if lessor pays any

Journal:
Lessor mencatat residual value (guaranteed/unguaranteed)
Dr. Lease receivable
Cr. Equipment

b. Sales – type (involve profit*)

Lease receivable:
 PV MPL
 Unguaranteed residual value
 Deduct by executory cost, only if lessor pays any

Sales revenue (include guaranteed residual value)

COGS (deduct by unguaranteed residual value)

Journal:
Dr. COGS
Dr. Lease receivable
Cr. Sales receivable
Cr. Inventory

Dr. Cash
Cr. Lease receivable

*Profit = FV leased asset – Lessor’s CA/BV

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Revenue Recognition
Consignor Consignee
Shipment of consigned Dr. Inventory consigment
No entry
merchandise Cr. Finished goods inventory
Payment of freight costs by Dr. Inventory consigment
No entry
consignor Cr. Cash
Payment of advertising by Dr. Receivable from consignor
No entry
consignee Cr. Cash
Sales of consigned Dr. Cash
No entry
merchandise Cr. Payable to consignor
Dr. Cash Dr. Payable to consignor
Notification of sales,
Dr. Advertising expense Cr. Receivable from consignor
expenses, and remittance of
Dr. Commission expense Cr. Commision revenue
amount due
Cr. Reveneu from cons. sales Cr. Cash
Adjustment of inventory on Dr. COGS
No entry
consigment for cost of sales Cr. Inventory on consigment

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