• Unit 9: Long-Term Liabilities and Stockholders' Equity

    This unit addresses the two ways a company can raise funds: debt and equity. To finance long-term assets, companies issue long-term debt in the form of bonds. Equity is most often issued when companies begin operations to raise startup capital. If you want to learn more about debt and equity, you may be interested in BUS202: Principles of Finance. Understanding financing better, whether debt or equity, can help you understand your investment options, as well as the choices your company is presented with. Stocks and bonds are fundamental to both personal and corporate finance..

    Completing this unit should take you approximately 9 hours.

    • Upon successful completion of this unit, you will be able to:

      • describe the difference between bonds and capital stock;
      • describe par value, discount, and premium as they relate to bonds;
      • explain how interest rates affect bond prices;
      • prepare accounting entries for bonds issued at par, a discount, or a premium;
      • contrast common stock and preferred stock;
      • prepare a statement of shareholders' equity; and
      • develop accounting entries for paid-in capital, cash dividends, stock dividends, stock splits, and retained earnings appropriations.

    • 9.1: Long-Term Liabilities – Bonds

      • Stockholders' Equity: Classes of Capital Stock Book

        Read this chapter, which introduces long-term bonds, their value, how they compare with stock. Some companies expand using stock, while some use debt (bonds). The example exercises refer to Appendix A, which is included here.

      • Valuing Long-Term Bonds Page

        This video explains the valuation of various bond types and discusses finding the market price of a bond.

    • 9.2: Stockholders' Equity – Capital Stock

      • Stockholders' Equity: Classes of Capital Stock Book

        Read this chapter, which details stockholders' equity, specifically capital stock. You learn about the different classes of stock, their characteristics, how capital appears on the Statement of Stockholders' Equity, and the steps for issuing stock to the public.

      • Common Stock Page

        This video will explain the characteristics of common stock and how to record accounting transactions dealing with common stock.

      • Preferred Stock Page

    • 9.3: Stockholders' Equity – Corporations

    • Unit 9 Assessment

      • Practice Problems: Bonds Book

        Complete the demo problem, and self test true/false and multiple choice questions. Check your answers at the end after you finish.

      • Practice Problems: Stockholders' Equity Book

        Complete the demo problems, and self test true/false and multiple choice questions. Check your answers at the end after you finish.

      • Practice Problems: Corporations Book

        Complete the demo problems, and self test true/false and multiple choice questions. Check your answers at the end after you finish.

      • Unit 9 Assessment Quiz
        Receive a grade

        Take this assessment to see how well you understood this unit.

        • This assessment does not count towards your grade. It is just for practice!
        • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
        • You can take this assessment as many times as you want, whenever you want.