BU127 Chapter Notes - Chapter 11: Operating Lease, Capital Structure, Debits And Credits
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Non-current liabiliies include all of the enity"s obligaions that are classiied as current liabiliies, such as long-term notes and bond payables. Typically, a non-current liability will require payment more than one year in the future. The use of long-term debt ofers signiicant advantage to companies. The bond principal is the amount payable at the maturity data and the basis for compuing periodic cash interest payments. The principal is also called the par value, face amount, or maturity value. A bond always speciies the stated rate of interest and the iming of periodic cash payments, usually annually or semi-annually. Bonds payable are long-term debt for the issuing company. Notes payable are typically transacions with a single lender. Cash interest payments: these payments are computed by muliplying the principal amount imes the interest rate, called the coupon rate, or contract or stated rate, of interest stated in the bond contract.