Book Value Journal Entry

It s also known as the net book value.

Book value journal entry. After one month the net book value of the table equals 3 780 45 3 735. When the amount in the accumulated depreciation account reaches 3 780 the full value of our table has been recognized as depreciation expense on the income. Businesses can use this calculation to determine how much depreciation costs they can write off on their taxes.

The total book value for all of the preferred stock equals the book value per share of preferred stock times the number of shares of preferred stock outstanding or 40 800 136 x 300 40 800. The possible line item entries associated with the book value method are as follows. 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.

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. 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. Credit the discount on bonds payable account if used which eliminates the bond liability reduction.

Debit the bonds payable account which eliminates the bond liability. 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. 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.

Debit the premium on bonds payable account if used which eliminates the excess bond liability. 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 disposal of fixed assets journal entry would be as follows.