334 Long Term Debt

Liabilities

Long Term

Synopsis

Account 334 is established to record the portion of loans, which are due beyond the next 12 month period.  The current portion of such loans (due within the next 12 months) is recorded in Account 314, Notes Payable – Other.

Debits

Credits

  1. Prepaid interest

  2. Payments made

  1. Obligations payable not due within 12 months

  2. Expired portion of prepaid interest

 

Comments

A credit balance represents amounts NOT DUE within 12 months from the current operating report date and not secured by real estate or vehicles. 

Note:

A detail of these liabilities should be made in this account or a suitable subsidiary record. This detail should indicate which notes, if any, are eligible for the Qualified Long Term Debt Working Capital Exclusion by meeting the following three criteria:

1. The note must be payable to the owner of a substantial equity interest.

2. Principal payments must be restricted to profits.

3. The amount to be excluded is limited to 50% of the Working Capital Standard.