function createFolder() {
    UpdateFormDigest(_spPageContextInfo.webServerRelativeUrl, _spFormDigestRefreshInterval);

    var appUrl = GetUrlKeyValue("SPAppWebUrl");
    var hostUrl = GetUrlKeyValue("SPHostUrl");

    var url = appUrl + "/_api/SP.AppContextSite(@target)/Web/Lists/getByTitle('Demo')/Items?@target='" + hostUrl + "'";

    var call = createFolderInternal().then(renameFolder);
    call.done(function (data, textStatus, jqXHR) {
        var message = jQuery("#message");
        message.text("Folder added");
    });
    call.fail(failHandler);

    function createFolderInternal() {
        var url = appUrl + "/_api/SP.AppContextSite(@target)/Web/Lists/getByTitle('Demo')/Items?@target='" + hostUrl + "'";

        var call = jQuery.ajax({
            url: url,
            type: "POST",
            data: JSON.stringify({
                "__metadata": { type: "SP.Data.DemoListItem" },
                Title: "Test Folder",
                FileLeafRef: "Test Folder",     // No effect here
                FileSystemObjectType: SP.FileSystemObjectType.folder,
                ContentTypeId: "0x0120"
            }),
            headers: {
                Accept: "application/json;odata=verbose",
                "Content-Type": "application/json;odata=verbose",
                "X-RequestDigest": jQuery("#__REQUESTDIGEST").val()
            }
        });

        return call;
    }

    function renameFolder(data) {
        var url = appUrl + "/_api/SP.AppContextSite(@target)/Web/Lists/getByTitle('Demo')/Items('" + data.d.Id + "')?@target='" + hostUrl + "'";

        var call = jQuery.ajax({
            url: url,
            type: "POST",
            data: JSON.stringify({
                "__metadata": { type: "SP.Data.DemoListItem" },
                Title: "Test Folder",
                FileLeafRef: "Test Folder"
            }),
            headers: {
                Accept: "application/json;odata=verbose",
                "Content-Type": "application/json;odata=verbose",
                "X-RequestDigest": jQuery("#__REQUESTDIGEST").val(),
                "IF-MATCH": "*",
                "X-Http-Method": "PATCH"
            }
        });
    }
}