ACCTMIS 2200 Lecture 13: 13. Debt Financing Lecture
29 Apr 2017
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Long term liabilities a. b. c. d. e. When a company borrows money from the bank for longer than a year, the obligation is called a long-term note payable. A mortgage is a special kind of note payable- one issues for property. These liabilities are typically repaid in equal installments, part of which are repayment of principal and part of which are interest. To spread the loan payments between interest and principal reduction use an amortization table. Payment interest reduction of principle loan balance (1) sandy is borrowing 32,500 - 3,000 - 4,000 = 25,500. Reduction of principal at 10/31 = 493-127. 5 = 365. 5. Loan balance at 10/31 = 25,500 - 365. 5 = 25,134. 5. Loan balance 11/30 = 25,134. 5 - 367. 33 = 24,767. 17. A special type of note payable (borrowing from bank) Secured by the pledging of certain assets, usually real estate, as collateral. Widely used by individuals to purchase homes and by companies to acquire plant assets.
