Hello in this lecture we will discuss the accounting building blocks and the double entry accounting system. At the end of this we will be able to define and describe the double entry accounting system, write down the accounting equation and define each individual part of it, define and describe debits and credits, define a balance sheet and list its parts define an income statement list its parts and explain the relationship between the balance sheet and the income statement. Okay, so starting off every business and accounting software uses the double entry accounting system. So the double entry accounting system, it’s kind of like the math behind the calculator, every software is going to use it. In order to understand what the system is doing, we need to understand the double entry accounting system.
In this presentation, we will calculate the bond price using present value tables. Remember that the bonds is going to be a great tool for understanding the time value of money. Because of those two cash flow streams we have when with relation to bonds, meaning we’re going to pay the bond back the face amount of the bond, and we’re going to have the income stream. And those are going to be perfect for us to think about time value of money, how to calculate time value of money, our goal being to get a present value of those two streams. So we’re going to think of those two streams separately generally, and present value each of them to find out what the present value of the bond will be. We can do that at least three or four different ways. We can do that with a formula actually doing the math on it. We can do it now, which is probably more popular. Now. Do it with a calculator or with tables in Excel, I would prefer Excel or we can use just tables pre formatted tables. The goal here the point is to really understand what we’re doing in terms of what what is happening, what can it tell it? What can it tell us, and then understand that these different methods are all doing the same thing.