Tag: Long-Term Debt
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Bookkeeping – Loan Accounting (Lesson 54)
Almost every small business borrows money. The most common reason is to purchase a fixed asset of some sort. The amount borrowed is most often a long-term liability.
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Debt or Equity in Small Business – Fundamentals
Small business books and manuals explain the formula used to determine whether additional debt increases the return for investors commonly known as return on investment (ROI).
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Amortization of Financing Costs
When a business acquires a loan there are typically closing costs involved. Generally Accepted Accounting Principles (GAAP) require these financing costs to be amortized (allocated) over the life of the loan. There are several principles the reader needs to understand to properly calculate and assign these costs to the financial statements. This lesson explains the basic business…