AFM101 Chapter Notes - Chapter 11: Operating Lease, Financial Accounting Standards Board, Finance Lease

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Donna Psutka

Document Summary

Chapter 11 notes reporting and interpreting non-current liabilities. Raising long-term debt from financial service organizations is called private placement. This type of debt is called a note payable, written promise to pay a stated sum of money at one or more specified future dates called maturity dates. Company"s need for debt capital exceeds capability of any single creditor, issue bonds. A bond principal is called the par value, face amount, and maturity value, amount that will be. Secured or unsecured loans -> secured means can repossess lender"s items paid when bond matures. Stated rate is rate of interest per period specified in bond contract. A debenture is an unsecured bond; no assets are specifically pledged to guarantee repayment. Callable bonds may be called for early retirement at the option of the issuer. Convertible bonds may be converted to other securities of the issuer, usually common shares.