Heineken n. v. reports the following information

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Heineken N. V. reports the following information for its Loans and Borrowings as of December 31, 2010, including proceeds and repayments for the year ended December 31, 2010 (euros in millions).
Loans and borrowings (noncurrent liabilities) 
Loans and borrowings, December 31, 2010 . . . . . . . . . . . . . . . . . .8,078 
Proceeds (cash) from issuances of loans and borrowings . . . . . . . 1,920 
Repayments (in cash) of loans and borrowings . . . . . . . . . . . . . . (3,127)

1. Prepare Heineken's journal entry to record its cash proceeds from issuances of its loans and borrowings for 2010. Assume that the par value of these issuances is  2,000. 
2. Prepare Heineken's journal entry to record its cash repayments of its loans and borrowings for 2010. Assume that the par value of these issuances is  3,000, and the premium on them is  32. 
3. Compute the discount or premium on its loans and borrowings as of December 31, 2010, assuming that the par value of these liabilities is  8,000. 
4. Given the facts in part 3 and viewing the entirety of loans and borrowings as one issuance, was the contract rate on these loans and borrowings higher or lower than the market rate at the time of issuance? Explain. (Assume that Heineken's credit rating has remained the same.)

Reference no: EM13901071

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