Long-Term Debt Definition.

Long-term debt is defined as any debt owed by a company that has a maturity date of more than one year from the date of the balance sheet. Long-term debt can come in the form of bonds, loans, or lines of credit. What are the three components of debt? 1) The principal: This is the amount of money that was originally borrowed and is typically the largest portion of the debt.

2) The interest: This is the amount of money that must be paid in addition to the principal and is typically a smaller portion of the debt.

3) The term: This is the amount of time that the debt must be repaid, and can vary depending on the terms of the loan.

What are 3 common long-term liabilities? 1. Corporate bonds: Corporate bonds are a type of debt security issued by a corporation in order to raise capital. The proceeds from the sale of corporate bonds are typically used to finance expansionary projects, such as new product development or acquisitions.

2. Bank loans: Bank loans are another common source of long-term financing for businesses. Bank loans are typically used for more general purposes, such as working capital or general corporate purposes.

3. Leases: Leases are a type of long-term liability commonly used by businesses in order to finance the purchase of equipment or property. Under a lease agreement, the lessee (the party renting the equipment or property) is obligated to make periodic payments to the lessor (the owner of the equipment or property) over the term of the lease.

What are the 5 sources of finance?

1. Equity financing: Equity financing refers to the process of raising capital by selling shares in a company to investors. This is typically done through a public offering, although private placements are also possible.

2. Debt financing: Debt financing refers to the process of borrowing money from lenders and then repaying the debt over time. This can be done through a variety of means, including bonds, loans, and lines of credit.

3. Asset-based financing: Asset-based financing refers to the process of using a company's assets as collateral to secure financing. This can be done through a variety of means, including loans, lines of credit, and leases.

4. Venture capital: Venture capital refers to the process of raising capital from investors who are willing to take on a higher level of risk in exchange for the potential for higher returns.

5. Private equity: Private equity refers to the process of raising capital from investors who are willing to invest in a company that is not publicly traded.

What are the two types of long term debt?

1. Senior debt: This is the debt that has first claim on a company's assets and income. If a company goes bankrupt, senior debt holders will be repaid before any other creditors.

2. Subordinated debt: This is the debt that has second claim on a company's assets and income. If a company goes bankrupt, subordinated debt holders will only be repaid after senior debt holders have been repaid. What is long term debt also called? Long term debt is also called corporate debt. This debt is typically used to finance capital expenditures and is not due for a set period of time. This type of debt is typically issued in the form of bonds.