Long Term Loans PayableLong-term loan liabilities
Abstract - Note 9 Short-term debt
What is the importance for the user of the differentiation between short-term and long-term debt? of a pre-existing deal? This is a credit whose aim is to fund the day-to-day running of a business. It is used to clarify debts, salaries, etc. What is the accounting policy for sales not yet generated? What is considered in connection with gifts as well as trust programmes?
What is the profit margin? What is the accounting for guarantees? Wage payment: Account for the net wage paid to the employee.
Balance sheet handling of the credit
Sarah took out a USD 30000 US dollar credit facility in January 2009. What is the presentation of the amount due of the loans in the 30 September 2009 accounts? That portion payable within one year of the date of the financial statements (10,000) is a short-term financial liability. 1,000,000 is a short-term financial asset.
Remaining liabilities have a remaining term of more than one year and are therefore non-current liabilities. We should probably incur interest expenses, but without information on interest levels we cannot do that. When we know that the credit has an interest of 10% pa, we could do the following:
The income statements should contain $750 in interest expenses. David agrees, but I suppose Bhagat speaks strongly in relation to the credit.