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Accrued interested is added to the Liability as time goes on, but it is not there on Day 0. Furthermore, businesses borrow money in order to use it to increase
by skookumchuck 8y ago
Accrued interested is added to the Liability as time goes on, but it is not there on Day 0. Furthermore, businesses borrow money in order to use it to increase assets, not just sit in a pile.
- kbenson 8y ago> but it is not there on Day 0. I'm pretty sure there are loans where it is, or at least a portion of it is, or at a bare minimum there's an early repayment fee. It would not surprise me to learn that in the world of business finance, these happen. It also wouldn't surprise me to learn that these are used creatively to shift money between entities.
- skookumchuck 8y agoI've borrowed plenty of money in business without such fees, and I'm a pipsqueak nobody.
- kbenson 8y agoI didn't mean to imply these loans were the norm, just that I believe they exist, while your prior comment seemed to imply they did not.