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What are debentures, mortgages and long term loans?
Title: What are debentures, mortgages and long term loans?
Category: Business & Economy
Details: Words: 502 | Pages: 2.1 (approximately 235 words/page)
What are debentures, mortgages and long term loans?
Debentures, Mortgages and Long-Term Loans As we saw from the explanation of long-term liabilities, they are liabilities that the firm has which are due in over a year. There are various possibilities for this:- ·Debentures ·Mortgages ·Long-term loans Debentures A debenture is a form of borrowing by a firm. It may issue debentures of a fixed value - say £1000 or £5000 - at a certain rate of interest. These debentures may be bought by individuals or by financial …showed first 75 words of 502 total…
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…showed last 75 words of 502 total…is more certain of recovering their money in the event of a problem.
All these long-term liabilities will be shown on a balance sheet and subtracted off the net current assets to give the net assets. They may alternatively be shown as a part of the firm's source of funds in the bottom half of the balance sheet. Where they are shown is simply an accounting convention and does not alter their meaning at all.
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