{"id":302,"date":"2024-09-06T16:48:27","date_gmt":"2024-09-06T16:48:27","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-long-term-financing\/"},"modified":"2024-09-06T16:48:27","modified_gmt":"2024-09-06T16:48:27","slug":"introduction-to-long-term-financing","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-long-term-financing\/","title":{"raw":"Introduction to Long-term Financing","rendered":"Introduction to Long-term Financing"},"content":{"raw":"\n<h2>What you will learn to do: recognize long-term debt financing options<\/h2>\nThere are two basic ways companies raise money for long-term capital projects:\n<ul>\n \t<li style=\"font-weight: 400;\">Debt financing<\/li>\n \t<li style=\"font-weight: 400;\">Equity financing<\/li>\n<\/ul>\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.\n\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.\n","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","protected":false},"author":6,"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\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":300,"module-header":"","content_attributions":[{"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"}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/302"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":0,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/302\/revisions"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/300"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/302\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=302"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=302"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=302"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}