Operating leases are long-term leases that do not meet one of the five criteria for finance leases.

	True
	False

Short-term leases have lease terms of 12 months or less and do not have long-term purchase options. Examples include most car and apartment rental agreements.

	True
	False

A mortgage is a legal agreement that helps protect a lender if a borrower does not make required payments on notes or bonds. A mortgage gives the lender a right to be paid from the cash proceeds of the sale of a borrowers assets identified in the mortgage.

	True
	False

An installment note is a liability requiring a series of payments to the lender. Installment notes are common for franchises and other businesses when lenders and borrowers agree to spread payments over time.

	True
	False

Bond advantages: Bonds do not affect owner control, interest on bonds is tax deductible, and bonds can potentially increase return on equity.

	True
	False

Market rate: The interest rate that borrowers are willing to pay and lenders are willing to accept.

	True
	False

Premium bonds: Bonds issued with a contract rate lower than the market rate.

	True
	False