{"id":4011,"date":"2020-10-24T15:41:18","date_gmt":"2020-10-24T15:41:18","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=4011"},"modified":"2020-11-17T18:38:28","modified_gmt":"2020-11-17T18:38:28","slug":"introduction-to-long-term-financing","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/introduction-to-long-term-financing\/","title":{"raw":"Introduction to Long-term Financing","rendered":"Introduction to Long-term Financing"},"content":{"raw":"<h2>What you will learn to do: recognize long-term debt financing options<\/h2>\r\nThere are two basic ways companies raise money for long-term capital projects:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Debt financing<\/li>\r\n \t<li style=\"font-weight: 400;\">Equity financing<\/li>\r\n<\/ul>\r\n<img class=\"alignright wp-image-4950 \" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/02212409\/bar-984527_1920-1024x683.jpg\" alt=\"People in a cafe.\" width=\"401\" height=\"267\" \/>Equity financing means bringing in new owners and is addressed in another module. In a prior module, you were exposed to short-term financing options, such as notes payable, revolving lines of credits, and accounts payable. Short-term financing is usually used to fund current operations, and that\u2019s why it is classified as a current liability. In this module, we\u2019ll be studying using long-term debt to finance expansion and other capital projects.\r\n\r\nThis section will cover the basics of recording borrowing from a bank, including the ramifications of paying interest on money, which is basically like rent. In subsequent sections, we\u2019ll cover more sophisticated forms of long-term borrowing, including leases and bonds, as well as some of the other noncurrent liabilities that companies incur in order to do business.","rendered":"<h2>What you will learn to do: recognize long-term debt financing options<\/h2>\n<p>There are two basic ways companies raise money for long-term capital projects:<\/p>\n<ul>\n<li style=\"font-weight: 400;\">Debt financing<\/li>\n<li style=\"font-weight: 400;\">Equity financing<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-4950\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/02212409\/bar-984527_1920-1024x683.jpg\" alt=\"People in a cafe.\" width=\"401\" height=\"267\" \/>Equity financing means bringing in new owners and is addressed in another module. In a prior module, you were exposed to short-term financing options, such as notes payable, revolving lines of credits, and accounts payable. Short-term financing is usually used to fund current operations, and that\u2019s why it is classified as a current liability. In this module, we\u2019ll be studying using long-term debt to finance expansion and other capital projects.<\/p>\n<p>This section will cover the basics of recording borrowing from a bank, including the ramifications of paying interest on money, which is basically like rent. In subsequent sections, we\u2019ll cover more sophisticated forms of long-term borrowing, including leases and bonds, as well as some of the other noncurrent liabilities that companies incur in order to do business.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-4011\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Introduction to Notes Payable. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li><strong>Authored by<\/strong>: Free-Photos. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/photos\/bar-pub-restaurant-drinking-984527\/\">https:\/\/pixabay.com\/photos\/bar-pub-restaurant-drinking-984527\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: https:\/\/pixabay.com\/service\/terms\/#license<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":90270,"menu_order":2,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Notes Payable\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"Free-Photos\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/photos\/bar-pub-restaurant-drinking-984527\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"https:\/\/pixabay.com\/service\/terms\/#license\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-4011","chapter","type-chapter","status-publish","hentry"],"part":825,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/90270"}],"version-history":[{"count":4,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4011\/revisions"}],"predecessor-version":[{"id":6087,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4011\/revisions\/6087"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/825"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/4011\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=4011"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=4011"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=4011"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=4011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}