ACCT 1201 Lecture Notes - Finance Lease, Operating Lease, Cash Flow
22 Mar 2013
School
Department
Course
Professor
Document Summary
Short-term liabilities: income taxes payable, accrued compensation, payroll taxes payable, notes payable, current portion of long-term debt, deferred revenues. Long-term notes payable and bonds: private placement (often called note payable) long-term debt raised directly from financial service organizations (example: banks, trusts) Chapter 4 example, where facebook loaned money to myspace: bonds publicly traded debt. With bonds you are acting as a bank the big difference is the public aspect: bondholders can sell their bonds to other investors prior to maturity, bonds covered in chapter 10. Lease liabilities: operating lease - does not meet any of the four criteria (see below) established by. Gaap and does not cause the recording of an asset and liability: no liability is recorded when an operating lease is created. Instead, company records rent expense as it uses the asset. The present value of the lease payments is 90% or more of the fair market value of the asset when the lease is signed.
