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Accounting for Bond Liabilities and Investments: A Cash Flow Teaching Approach

Robert Bloom (John Carroll University, USA)

Advances in Accounting Education: Teaching and Curriculum Innovations

ISBN: 978-1-80382-728-5, eISBN: 978-1-80382-727-8

Publication date: 12 December 2022

Abstract

This chapter presents an approach to teaching bond liabilities and investments in the typical undergraduate Intermediate Accounting II course, using the statement of cash flows, including both indirect and direct approaches. From the perspectives of the issuer and holder, emphasis is placed on journal entries reflecting interest accruals, amortization of discounts and premiums, and early extinguishment of such financial instruments, as well as the treatments of such entries in the statement of cash flows. Students are expected to explain the reasons underlying such treatments. The results of this innovation suggest that students enhance their understanding of accounting for bonds and the statement of cash flows by application of this approach.

Keywords

Citation

Bloom, R. (2022), "Accounting for Bond Liabilities and Investments: A Cash Flow Teaching Approach", Calderon, T.G. (Ed.) Advances in Accounting Education: Teaching and Curriculum Innovations (Advances in Accounting Education, Vol. 26), Emerald Publishing Limited, Bingley, pp. 105-122. https://doi.org/10.1108/S1085-462220220000026006

Publisher

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Emerald Publishing Limited

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