Long-term loans are one of the main sources of funds for project investment. An investment project needs a lot of money, and it is often not enough to rely on its own funds, so it needs to borrow from abroad. Long-term loans generally come from domestic banks and international development institutions. "Corporate bonds" are the basic long-term debt securities of the company, and they are long-term promissory notes with a term of 10 years or more.
Important matters such as repayment of principal and interest, guarantee methods, etc. are agreed in trust deed. The financing of long-term loans should be limited to the part of funds that enterprises lack for long-term investment, because except for some international institutions, the cost of long-term loans is very high, so try to borrow less. The repayment of long-term loans can not only exchange new debts for old ones.
Generally, regular repayment can use sinking fund and installment repayment. When borrowing long-term loans, decision makers should fully consider the expected cash flow and future interest rate changes of investment projects in order to obtain lower financing costs. To reflect the various long-term loans of enterprises.
The subject of "long-term loan" should be set up to calculate the borrowing, accrued interest, return and debt of various long-term loans. The account belongs to the liability category, and its lender registers the borrowed money and expected interest payable; The amount of principal and interest registered by the borrower; The ending balance is in the lender, which indicates the outstanding principal and interest of long-term loans.