Page 31 - CFA Lecture Day 10 Slides
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Session Unit 8:
31. Non-Current (Long-Term) Liabilities (B/A/A/A/C/C/A)
tanties
A. At the inception of the lease, the present value of the lease payments is $43,121 (BGN mode: N = 5, I = 8, PMT =
10,000, FV = 0, solve for PV). After the first payment is made, the balance of the lease liability is $43,121 – 10,000
principal payment = $33,121. Interest expense for the first year is $33,121 × 8% = $2,650
A. Because A – L = E, shareholders’ equity is 98,500 assets – 5,000 accrued liabilities – 12,000
short-term debt – 39,000 bonds payable = $42,500. Thus, debt-to-equity is (12,000 short-term debt
+ 39,000 bonds payable) / 42,500 equity = 1.2. Only interest-bearing liabilities are considered debt.
Accrued liabilities are not interest bearing.
