BU127 Lecture Notes - Lecture 19: Operating Lease, Premium Times, Finance Lease
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BU127 Full Course Notes
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Bu127 lecture #19: reporting and interpreting non-current liabilities. Financial leverage the use of borrowed funds to increase the rate of return on owner"s equity occurs when the interest rate on debts is lower than the rate of return on total assets. Types of long-term debt long-term debt is available to companies in various forms: bank loans, notes, mortgages, bonds and debentures. Reporting bond transactions (slide #15 is an important slide for calculations) the issue price of the bond is determined by the market, based on the time value of money. Market interest rate: the interest rate used to compute the present value stated rate: only used to compute the periodic interest payments. The bonds mature in 10 years and interest is paid semi-annually. Bonds issued at discount (slide #20 is a very important slide) *ifrs pretty much ignores the dr to discount so the cr to bonds payable would be 88 530.
