Collection of Accounts Receivable Journal Entry Accounts Receivable Accounts receivable is a current asset that is typically realized within a year and represents money owed by customers for goods or services they have received but not yet paid for. It is created when customers purchase products on credit and serves as an asset on the …
Issuance of Preferred Stock Journal Entry Preferred Stock Preferred stock is a type of security that has characteristics of both stocks and bonds. It pays a specified dividend and has priority over common stock when it comes to receiving dividends. Although it is not necessarily preferred by most investors, it usually pays out a higher …
Bond Premium Journal Entry Bonds Payable Bonds payable are a type of long-term liability that is typically recorded within a company’s balance sheet. It is an obligation to pay a specified sum of money at a future date to the bondholders. Bonds payable are created when a company issues bonds and are usually classified as …
Repurchasing Stock Journal Entry Repurchasing Stock Repurchasing stock is the process by which a company buys back some of its own shares from the market. This could be done by either buying shares from the market or offering shareholders the option to sell their shares to the company. Companies typically do this when they believe …
Impaired Asset Journal Entry Impaired Assets An impaired asset is an asset whose value has been reduced due to economic, external or internal factors. These factors can include physical damage, failure to bring in post-merger benefits, economic underperformance, lack of maintenance, discontinued plans or restructuring, drastic changes to the legal climate, significant changes in the …
Journal Entry For Loan Origination Fees Loan origination fees Loan origination fees are a type of fee charged by financial institutions at the time of loan origination. This fee is spread over the loan period and is typically 1% of the loan amount. In addition to this fee, a loan application fee is charged by …
Interest Accrued Journal Entry Interest Accrued Accrued interest is the interest that has been earned but not yet paid before the end of an accounting period. It is recorded as an adjusting journal entry to comply with the revenue recognition and matching principles. The amount of interest accrued is calculated by multiplying the outstanding principle …
Freight Charges Journal Entry Freight Charges Freight charges are a necessary cost for the transport of goods. They cover a variety of items including the cost of transport, fuel charges, local taxes, special charges, handling charges, and emergency costs. All these components come together to form the overall freight charge for a shipment. It is …
401k Employer Contributions Journal Entry 401k Employer Contributions Employer contributions to 401(k) plans include both nonelective contributions and matching of employee contributions, with the match percentage varying depending on the amount of the employee deferral. Option 1 is a nonelective contribution, wherein the employer contributes a set percentage of each employee’s compensation to their account. …
Unrealized Gain Journal Entry An unrealized gain is an increase in the value of an asset that has not been sold. For example, if you buy a stock for $10 and it rises to $15, you have an unrealized gain of $5 per share. However, this gain is only on paper, as you have not …