Unit 9: Long-Term Liabilities and Stockholders’ Equity
This unit addresses the two ways in which a company can raise funds: debt and equity. In order to finance long-term assets, companies issue long-term debt in the form of bonds. Equity is most often issued when companies begin operations to raise startup capital. In BUS202: Principles of Finance, you may learn more about the balance between debt and equity in a company.
Completing this unit should take you approximately 8 hours.
Upon completion of this unit, you will be able to:
- describe the difference between bonds and capital stock;
- describe par value, discount, and premium as they relate to bonds;
- explain how interest rates affect bond prices;
- account for bonds issued at par, a discount, or a premium;
- identify different types of capital stock and discuss differences between common stock and preferred stock;
- prepare a statement of shareholders' equity; and
- account for paid-in capital, cash dividends, stock dividends, stock splits, and retained earnings appropriations.