What is Total BV of LTD and Other LT Liabilities @ end of 03 Add Current + LTD What is expected cash payment for debt principal in 04 Look @ current Portion @ end of 03 (See LTD Pg. “Other LTD” Last Raise Cash? – SCF How have iRates Changed – FMV v. BV If market rate for zero coupon bonds chs how much does NBVs? No change in NBV Early Retirement…Mkt Rate < Irate implicit in Bond Record loss since price and yield are inversely related Must pay mkt rate to retire Look @ Entry ????? How much additional cash was raised – SCF Additions to LTD – Repayments How much cash paid for LTD and capital lease obligations during Investing Activities on SCF What was the amount of cash paid to early retire LTD? Cash paid for LTD – Current Payments (BS end of 01) Net book value of net ltd during 01? Assumptions state all ltd @ end of yr. SCF 25k inflow from new borrowing Journal Entry for Issuance of Zero Coupon Cash 100k or Cash 100k Debentures 100K Disc on Debentures 15k Debentures 115k Journal entry in fiscal 20091 for zero coupons issued in 98 Interest found in 2 ways: 1 Change in Debentures 2 irate in foot note x opening balance in debentures then… Interest Expense 6827 Debentures 6827 Or Interest Expense Disc on Debentures (Use Same as previous Q) What was Total amt of Principal payments made on NP in 99 SCF – “Repayments on NP” How much Reclassified? NP – NonCurr NP - Curr Reclass | BB Repayments | BB | +New Issues (SCF) | +ReClass | (SCF) EB EB What Amt of NP issued dring 99 for other than Cash? 0 – T Accts reconcile Journal Entry for October to record interest/principal payments for “other NP” …(Account = intest on notes) 150 x 18%/12 = 2.25 Interest Expense 2.25 Other NP 17.75 Cash 20 ????? where 20 come from NBV of LTD and NP Retired @ Maturity during 98 See 97 on BS (78) LTD and NP ReClass | BB | Early Retirement | Issued ??? HOW EB No Gain/Loss Results from Retirement @ maturity To Calc Gain/Loss from Early Retirement: Total Payment = NBV of Debt @ Maturity (BS – 97) (SCF 98) + NBV of Debgty Prior (?????) T ACCT +/- Gain/Loss Bond Issued. ..Payments…1 @ maturity / inerest (price x iRate) Bonds at Par – Issues 10% w/ par values @ 100K 10 yrs (2 interest / yr) 20 payments of 10%/2=5x100k =5k annuity PV of Annuity – 20pds @5% use tables A. Single payment 100k x .3769 = 37690 B. Annuity 5k x 12.46 = 62310 Issue Price = 100k Effective rate of interest = Stated (10%) Thus PV of future Cash flows = Bond’s par amt. Bonds selling price = PV of future cash flows NOT Par value
This is the end of the preview.
access the rest of the document.