Hewlett packard company reports zero coupon notes issued

Assignment Help Accounting Basics
Reference no: EM13881053

1.The 2010 annual report of Hewlett Packard Company reports zero coupon notes issued at the end of its 1997 fiscal year. One billion, eight hundred million dollars face amount of 20 year debt sold for $968 million, a price to yield 3.149%. In fiscal 2002, HP 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 debt.

Required:
1. What journal entry did Hewlett Packard use to record the sale in 1997?
2. Using an electronic spreadsheet, prepare an amortization schedule for the notes. Assume interest is calculated annually and use numbers expressed in millions of dollars; that is, the face amount is $1,800.
3. What was the effect on HP's earnings in 1998? Explain.
4. From the amortization schedule, determine the book value of the debt at the end of 2002.
5. What journal entry did Hewlett Packard use to record the early extinguishment of debt in 2002, assuming the purchase was made at the end of the year?

Reference no: EM13881053

Questions Cloud

How does global context influence type of global knowledge : How does global context influence the type of global knowledge and competencies needed for successful global leadership
Why might a bumper crop detrimental for overall farm revenue : Court and legal reforms (to speed the process of litigation and lower its cost) will encourage more disputants to use the court system. Under what circumstances, could this cause an increase in total litigation spending?
Linearized radiation coefficient-radiation exchange : Write an expression for the linearized radiation coefficient corresponding to radiation exchange between the outer surface of the pipe and the furnace walls. Explain how to calculate this coefficient if the surface temperature of the tube is repre..
Develop a solution for bookstore inventory management system : Develop an object oriented solution for Bookstore Inventory Management System. Identify the necessary objects and actions that are required to produce your solutions.
Hewlett packard company reports zero coupon notes issued : 1.The 2010 annual report of Hewlett Packard Company reports zero coupon notes issued at the end of its 1997 fiscal year.
What is the business case for undertaking the project? : What is the business case for undertaking the project?
What strategy would you recommend that nbc pursue : After experiencing the unexpectedly lukewarm response prior to the games, what strategy would you recommend that NBC pursue?
Passage of an electric current : Consider steady-state conditions for which heat is uniformly generated at a volumetric rate q due to passage of an electric current. Using the energy balance method, derive finite-difference equations for nodes 1 and 13.
What are the restrictive covenants : Question: What are the Restrictive Covenants? How do they work? Whys does it matter to Management

Reviews

Write a Review

Accounting Basics Questions & Answers

  Business assets or capital assets during the year

Mr. Green seeks your advice as to the tax consequences attached to each offer. Assume that he will no other sale of business assets or capital assets during the year. What is your advice?

  Problem related to gross profit

Gomez Company had a gross profit of $360,000, total purchases of $420,000, and an ending inventory of $240,000 in its first year of operations as a retailer. Gomez's sales in its first year must have been:

  What is the minimum price slugger should charge

What is the minimum price Slugger should charge just to break even on the special order? Discuss potential problems Slugger could face if it accepted the order

  Santana rey is considering the purchase of equipment for

santana rey is considering the purchase of equipment for business solutions that would allow the company to add a new

  The board of directors declared a stock dividend

A corporation had 13,500 shares of $5 par value common stock outstanding when the board of directors declared a stock dividend of 4,995 shares. At the time of the stock dividend, the market value per share was $19. The entry to record this div..

  How is it that management role as financial

How is it that management role as financial stewards may be considered a conflict of interest with their position as employees of the company?

  Labor costs that are clearly associated with the specific

labor costs that are clearly associated with specific units or batches of product because the labor is used to convert

  High quality earnings-sustainable income

What is the Definition of the "High Quality of Earnings"? Why is this important in an organization? What is the Definition of "Sustainable Income"?

  Straight-line and effective interest method

Prepare Bond Amortization Schedules for both bonds using Straight-line and Effective Interest Method.

  On january 1 2014 the express corporation purchased 30 of

on january 1 2014 the express corporation purchased 30 of the common stock outstanding of the bangor corporation for

  Sarah jones the manager of the teen division of ellen

sarah jones the manager of the teen division of ellen clothing company was evaluating the acquisition of a new

  Computation of the manufacturing cost of units

Evaluate the statements made by Walker. Comment specifically on Walker's computation of the manufacturing cost of units sold and on whether it appears that the reduction in the cost of finished goods sold was achieved through more efficient operat..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd