Book Value Journal Entry

Debit the bonds payable account which eliminates the bond liability.

Book value journal entry. For example if it sold an asset on april 1 and last recorded depreciation on december 31 the company should record depreciation for three months january 1 april 1. The book value per share of the preferred stock equals the call price of 109 plus three years of dividends at 9 each or 136 109 27 136. Book value is equal to the cost of carrying an asset on a company s balance sheet and firms calculate it netting the asset against its accumulated depreciation.

In this example the net book value is calculated as follows. Accounting for depreciation to date of disposal when selling or otherwise disposing of a plant asset a firm must record the depreciation up to the date of sale or disposal. The book value of an asset is the value of that asset on the books the accounting books and the balance sheet of a company.

It s also known as the net book value. Credit the discount on bonds payable account if used which eliminates the bond liability reduction. The disposal of fixed assets journal entry would be as follows.

The possible line item entries associated with the book value method are as follows. Debit the premium on bonds payable account if used which eliminates the excess bond liability. What is book value.

Net book value original cost accumulated depreciation net book value 9 000 6 000 3 000 as the asset has no value this amount has to be written off as an expense to income statement of the business. Businesses can use this calculation to determine how much depreciation costs they can write off on their taxes. After one month the net book value of the table equals 3 780 45 3 735.