Restructuring Debt - Running head: SMITH JONES CONSTRUCTION...

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Running head: SMITH JONES CONSTRUCTION DEBT RESTRUCTURING 1 Smith Jones Construction Debt Restructuring Laura Munger ACC 545 July 11, 2011 Donna Young-Rojas
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SMITH JONES CONSTRUCTION DEBT RESTRUCTURING 2 Smith Jones Construction Debt Restructuring The management team of Smith Jones Construction has decided to restructure the debt of the company since the company is in financial trouble. The company needs to use their available assets to decrease their debt. There are several options available to the company to help to achieve this goal. First the company must look at the type of long-term debt that they have and the requirements that surround it. The long-term debt of a company consists of the probable future sacrifices of economic benefits that arise from present obligations that are not payable within a year (Kieso, Weygandt, & Wardield, 2007). The company’s long term debt is made up of bonds payable, notes payable, and capital leases. Their long-term debt totals $3,758,470 of $7,915,590 that is the total of their liabilities. That is 47% of the debt of the company. Bonds payable are secured by collateral or they can be unsecured. Bonds normally carry a stated rate of interest, while others are sold at a discounted rate (Kieso, Weygandt, & Wardield, 2007). There are bonds that can be called back by the issuing company before its mature date and
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This note was uploaded on 07/17/2011 for the course ACCOUNTING ACC 545 taught by Professor Youngrojas during the Spring '11 term at University of Phoenix.

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Restructuring Debt - Running head: SMITH JONES CONSTRUCTION...

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