§ 32.4200   Long term debt and funded debt.

   (a) This account shall include:

   (1) The total face amount of unmatured debt maturing more than one year from
   date of issue, issued by the company and not retired, and the total face
   amount of similar unmatured debt of other companies, the payment of which
   has been assumed by the company, including funded debt the maturity of which
   has been extended by specific agreement. This account shall also include
   such  items  as  mortgage bonds, collateral trust bonds, income bonds,
   convertible debt, debt securities with detachable warrants and other similar
   obligations maturing more than one year from date of issue.

   (2) The premium associated with all classes of long-term debt. Premium, as
   applied to securities issued or assumed by the company, means the excess of
   the current money value received at their sale over the sum of their book or
   face amount and interest or dividends accrued at the date of the sale.

   (3) The discount associated with all classes of long-term debt. Discount, as
   applied to securities issued or assumed by the company, means the excess of
   the book or face amount of the securities plus interest or dividends accrued
   at the date of the sale over the current money value of the consideration
   received at their sale.

   (4) The face amount of debt reacquired prior to maturity that has not been
   retired. Gain or loss shall be recognized at the time of reacquisition by
   credits or charges to Account 7300, Nonoperating income and expense, except
   that  material gains or losses shall be treated as extraordinary. (See
   Account 7600, Extraordinary items.)

   (5) The noncurrent portion of obligations applicable to property obtained
   under  capital  leases. Amounts subject to current settlement shall be
   included in Account 4130, Other current liabilities.

   (6) The amount of advance from affiliated companies. Amounts due affiliated
   companies which are subject to current settlement shall be included in
   Account 4000.

   (7) Investment advances, including those represented by notes.

   (8) Long-term debt not provided for elsewhere.

   (b) Subsidiary records shall be maintained for each issue. The subsidiary
   records shall identify the premium or discount attributable to each issue.

   (c) Premiums and discounts on long-term debt recorded in this account shall
   be amortized monthly by the interest method and charged or credited, as
   appropriate, to Account 7500, Interest and related items.

   (d) Debt securities with detachable warrants shall be accounted for in
   accordance with generally accepted accounting principles.

   (e) Securities maturing in one year or less, including securities maturing
   serially, shall be included in Account 4130, Other current liabilities.

   [ 67 FR 5689 , Feb. 6, 2002]

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