Reading: Short and Long Term Debt Financing
Applying for a Business Loan
•The
assets or other financial resources available to a business are called capital.
•Purchases
of plant assets used in the operation of a business are called capital
expenditures.
•Assets
pledged to a creditor to guarantee repayment of a loan are called collateral
Making
a Monthly Payment on a Long-Term Note Payable
Issuing
Bonds
•Bond:
A long term promise to pay a specified amount on a specified date and to pay
interest at stated intervals.
•All
bonds representing the total amount of a loan are called a bond issue.
- The process of selling bonds is commonly known as issuing bonds.
- The process of selling bonds is commonly known as issuing bonds.
•The
face value is the amount to be repaid at the end of the bond term.
•The
interest rate used to calculate periodic interest payments on a bond is called
the stated interest rate.
Issuing
Bonds
Short
Term Debt Financing Options
•Every
business needs cash to pay its operating expenses. Purchasing inventory and
paying the payroll are examples of daily activities that require a business to
earn revenue.
•The
payment of an operating expense is necessary to earn revenue is called revenue
expenditure.
Последнее изменение: вторник, 14 августа 2018, 08:29