Examples of payment date in the following topics:
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- Dividends are payments made by a corporation to its shareholders; the payment amount is reported as dividends payable on the balance sheet.
- For the company, a dividend payment is not an expense, but the division of after tax profits among shareholders.
- On the dividend declaration date, a company's board of directors announces its intention to pay a dividend to shareholders on record as of a certain date (date of record).
- Dividends payable is recorded as a current liability on the company's books; the journal entry confirms that the dividend payment is now owed to the stockholders.
- On the declaration date, the Board announces the date of record and a payment date; the payment date is the date when the funds are sent to the shareholders and the dividends payable account is reduced for the payment amount.
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- The bonds are dated 2010 December 31, call for semiannual interest payments on June 30 and December 31, and mature on 2020 December 31.
- Valley made the required interest and principal payments when due.
- To record periodic interest payment.
- Note that Valley does not need adjusting entries because the interest payment date falls on the last day of the accounting period.
- For example, assume the Valley bonds were dated 2010 October 31, issued on that same date, and pay interest each April 30 and October 31.
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- At maturity, firms should debit cash and credit held to maturity investments the balance of the principal payment.
- The issuer has to repay the nominal amount on the maturity date (which can be any length of time).
- As long as all due payments have been made, the issuer has no further obligations to the bond holders after the maturity date.
- During the life of the debt held to maturity, the company holding the debt will record the interest received at the designated payment dates.
- If a company paid $10,000 for 8% bonds, a journal entry is required to record the payment of principal at maturity.
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- A bond is a debt security under which the bond issuer owes the bond holder a debt including interest or coupon payments and or a future repayment of the principal on the maturity date.
- Variations exist in bond types, payment terms, and features.
- As long as all due payments have been made, the issuer has no further obligations to the bond holders after the maturity date.
- Callability — Some bonds give the issuer the right to repay the bond before the maturity date on the call dates.
- Putability — Some bonds give the holder the right to force the issuer to repay the bond before the maturity date on the put dates.
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- In turn, the customer must pay it within an established time frame, which is called the credit terms or payment terms.
- An example of a common payment term is Net 30, which means that payment is due at the end of 30 days from the date of invoice.
- The debtor is free to pay before the due date.
- To encourage this, businesses can offer a discount for early payment.
- Other common payment terms include Net 45, Net 60, and 30 days end of month.
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- However, the process of maintaining and collecting payments on the accounts receivable is more complex.
- Depending on the industry in practice, accounts receivable payments can be received up to 10 – 15 days after the due date has been reached.
- An example of a common payment term is Net 30, which means that payment is due at the end of 30 days from the date of invoice.
- The debtor is free to pay before the due date; businesses can offer a discount for early payment.
- Other common payment terms include Net 45, Net 60, and 30 days end of month.
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- In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within an established time-frame, called credit terms or payment terms.
- An example of a common payment term is Net 30, which means that payment is due at the end of 30 days from the date of invoice.
- The debtor is free to pay before the due date.
- Businesses can offer a discount for early payment.
- Other common payment terms include Net 45, Net 60, and 30 days end of month.
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- Long-term liabilities are liabilities with a due date that extends over one year, such as a notes payable that matures in 2 years.
- The position of where the debt should be disclosed is based on its maturity date in relation to the due date of other current liabilities.
- For example, a loan for which two payments of USD 1,000 are due--one in the next 12 months and the other after that date--would be split into one USD 1000 portion of the debt classified as a current liability, and the other USD 1000 as a long-term liability (note this example does not take into account any interest or discounting effects, which may be required depending on the accounting rules that may apply).
- Bonds are a form of long-term debt because they typically mature several years after their original issue date.
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- Companies can recognize revenue at point of sale if it is also the date of delivery or if the buyer takes immediate ownership of the goods.
- Goods sold, especially retail goods, typically earn and recognize revenue at point of sale, which can also be the date of delivery if the buyer takes immediate ownership of the merchandise purchased.
- Since most sales are made using credit rather than cash, the revenue on the sale is still recognized if collection of payment is reasonably assured.
- A street market seller recognizes revenue when he relinquishes his merchandise to a buyer and receives payment for the item sold.
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- The terms of a note usually include the principal amount, interest rate (if applicable), parties involved, date, terms of repayment (which may include interest), and maturity date.
- Demand promissory notes are notes that do not carry a specific maturity date, but are due on demand by the lender.
- Usually the lender will only give the borrower a few days notice before the payment is due.
- The note payable amount can include the principal as well as the interest payment amounts due.
- If periodic payments are made throughout the term of the note, the payments will reduce the notes payable balance.