ZuoTi.Pro
Question

Chapter 9 covers liabilities, including long-term notes and bonds. Notes and bonds are reported on the...

Chapter 9 covers liabilities, including long-term notes and bonds. Notes and bonds are reported on the financials at their face amount less any unamortized discount (or plus any unamortized premium). Review the 10-K of Starbucks (including the debt footnote) and answer the following for the most recent year ended 2014: What is the face value of Starbucks long-term debt? What amount of long-debt is reported on the balance sheet? What does the difference between these two amounts tell you?

Please provide more details in the answer. For reference please check and review the 10-K of Starbucks (including the debt footnote) and answer the following for the most recent year ended 2014.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Starbuck Financial ( on the basis of 10k ) extract (Sep 28,2014) – Long term Debt- $ 2048.3

As per Table of content relates to Long term debt represents following points as per Financial Instrument disclosure in the financial

Fair value of Long term debt is estimated based on the Quoted Market price as per Fair valuation rules.

As per Foot note , it was clearly disclosed Issuance of Financial debt under different period of time with Interest rate + relevant fair value disclosure While disclose the number , We have considered unamortized discount factor also . Total Face value of Debt Liability as on 28th Sept 2014 - $ 2050-Aggregate Unamortized discount $ 1.7 = Net value $ 2048.3 .

Discount represents mainly difference between Market price of Liability and face value . Company can choose option for Amortized over the period of Bond and expense it . Company can opt for certain part as unamortized and disclose in the financial accordingly .

Bond price fluctuate as per Market Interest . s we are aware that Bond price and Interest always act inverse way . In certain cases Bond coupon or Interest rate is below Market price , they will only be priced at discount to their face value.

Bond Investor buys bond at discount from face/ par value when Interest rate in the market exceeds interest rate offered .

Company due to material  matter can not write off all discount at one go . Therefore they opt amortized the discount . The unamortised  discount continue to exist on the Balance Sheet unit bond reach maturity

0 0
Add a comment
Know the answer?
Add Answer to:
Chapter 9 covers liabilities, including long-term notes and bonds. Notes and bonds are reported on the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Chapter 14 Long-Term Liabilities Directed Reading Guide LO1. How are long-term notes payable and mortgages payable...

    Chapter 14 Long-Term Liabilities Directed Reading Guide LO1. How are long-term notes payable and mortgages payable accounted for? In your own words, what is a long-term liability? Long term-liabilities are liabilities that do not need to be paid within one year or within the entity’s operating cycle, whichever is longer. Both long-term notes payable and mortgages payable are common long-term liabilities.     To record the purchase of a building for $150,000, paying $100,000 in cash and signing a 30-year mortgage...

  • Current Portion of Long-Term Debt Connie's Bistro, Inc. reported the following information about its long-term debt...

    Current Portion of Long-Term Debt Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement (in millions): WN Long-term debt is composed of the following: December 31 Current Year Preceding Year Total Notes payable $742,000 (215,200) $408,100 (200,300) Less current portion Long-term debt $526,800 $207,800 a. How much of the notes payable was disclosed as a current liability on the current year's December 31 balance sheet? co. O b. How much...

  • Current Portion of Long-Term Debt Connie's Bistro, Inc. reported the following information about its long-term debt...

    Current Portion of Long-Term Debt Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt consists of the following: December 31 Current Year Preceding Year Total long-term debt $463,100 $254,700 (134,300) (125,000) Less current portion Long-term debt $328,800 $129,700 a. How much of the long-term debt was disclosed as a current liability on the current year's December 31 balance sheet? b. How much did the total current...

  • 1. All of the following are reported as current liabilities except a.   accounts payable. b.   bonds...

    1. All of the following are reported as current liabilities except a.   accounts payable. b.   bonds payable. c.   notes payable. d.   unearned revenues. 2. The relationship between current liabilities and current assets is a.   useful in determining income. b.   useful in evaluating a company's liquidity. c.   called the matching principle. d.   useful in determining the amount of a company's long-term debt. 3. Most companies pay current liabilities a.   out of current assets. b.   by issuing interest-bearing notes payable. c.   by...

  • 1. Current Portion of Long-Term Debt 2. Connie's Bistro, Inc. reported the following information about its...

    1. Current Portion of Long-Term Debt 2. Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt is composed of the following: 3. December 31 4. Preceding Current Year Year 5. Total Notes payable $742,000 $408,100 6 (215,200) (200,300) Less current portion $526,800 $207,800 Long-term debt 7. a. How much of the notes payable was disclosed as a current liability on the current year's December 31 balance...

  • Team Assignment #3 – Long-Term Debt At the end of 2000, Nittany, Inc. issued zero-coupon bonds...

    Team Assignment #3 – Long-Term Debt At the end of 2000, Nittany, Inc. issued zero-coupon bonds that mature in 2020. The face value of the bonds was $1.8 billion, and they sold for $968 million on the issue date. The effective market interest rate was 3.149% on that date. At the end of 2005, Nittany repurchased $257 million in face value of the notes for a purchase price of $127 million, resulting in a gain on the early extinguishment of...

  • Chapter 14 Long-Term Liabilities: Bonds and Notes 705 0BJ.3 p685 PE 14-4B Discount amortization Using the...

    Chapter 14 Long-Term Liabilities: Bonds and Notes 705 0BJ.3 p685 PE 14-4B Discount amortization Using the bond from Practice Exercise 14-3B, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. OB) EE 14-5 p 685 PE 14-5B Issuing bonds at a premium OBJ. 3 how Me ow On the first day of the fiscal year, a company issues an $8,000,000, 11%, five-year bond that pays semiannual interest of $440,000 ($8,000,000 11%...

  • can you help me with 1d and proper explanation of 2b CARP: CH14 Long-Term Debt (Part...

    can you help me with 1d and proper explanation of 2b CARP: CH14 Long-Term Debt (Part III of the Corporate Annual Report Project) NOTE: ALL DOCUMENTATION TO SUPPORT YOUR ANSWERS MUST COME FROM THE FINANCIAL STATEMENTS AND/OR THE NOTES TO THE FINANCIAL STATEMENTS. 1. Locate the financial statement that reveals to the reader the debt balances at fiscal year end February 2, 2019. a. On what page of the annual report does that statement appear? F-7 b. What dollar amount...

  • Reporting reconciliation between fund and government-wide financial statements Sai-Tu Village reported outstanding long-term bonds payable of $6,000,000 in the governmental activities column of its go...

    Reporting reconciliation between fund and government-wide financial statements Sai-Tu Village reported outstanding long-term bonds payable of $6,000,000 in the governmental activities column of its government-wide statement of net position for the year ended December 31, 2019. During 2020, Sai-Tu Village sold $500,000 of new general obligation bonds and repaid $300,000 of bonds outstanding at the beginning of the year. Based on this information, determine the reconciliation amounts reported in the two funds’ financial statements to the two government-wide financial statements....

  • 6) Journalize transactions for long-term notes payable, bonds payable and mortgages payable Assume bonds payable are...

    6) Journalize transactions for long-term notes payable, bonds payable and mortgages payable Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. 2. Interest Exp. $6,600 On June 30, Porter Company issues 11%, five-year bonds payable with a face value of $120,000. The bonds are issued at face value and pay interest on June 30 and December 31. Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT