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What is the purpose of a line of credit for a business

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Reference no: EM132703344

Question 1: What is the difference between classification of a note as short term or long term?

Question 2: At the beginning of year 1, B Co. has a note payable of $72,000 that calls for an annual payment of $16,246, which includes both principal and interest. If the interest rate is 8 percent. What is the amount of interest expense in year1 and in year 2? What is the balance of the note at the end of year 2?

Question 3: What is the purpose of a line of credit for a business? Why would a company choose to obtain a line of credit instead of issuing bonds?

Question 4: What mechanism is used to adjust the stated interest rate to the market rate of interest?

Question 5: What type of transaction is the issuance of bonds by a company?

Reference no: EM132703344

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