Students shall read the attached case information and prepare thorough responses to the requirements as...
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Accounting
Students shall read the attached case information and prepare thorough responses to the requirements as listed. Students shall show all their work if asked to calculate an amount/ratio. Journal entries shall be displayed in journal format
How does Apples issuance of bonds and buyback of its own stock impact its accounting equation?
In May 2017, Apple (NASDAQ: AAPL) filed a prospectus with the SEC, indicating that it would be issuing another $7 billion in bonds during 2017. (Apple issued $10 billion in bonds in February 2017 in the US and $1 billion in Taiwan.)
With the bond proceeds, Apple will be buying back its own stock. Apple has also indicated that there will be a 10.5 percent dividend increase for its shareholders.
Question part 1
What journal entry would Apple make when it issues $7 billion in bonds?
How are assets, liabilities, and equity impacted by the bond issuance?
Name the account(s) impacted and whether an increase of decrease.
Answer & Explanation
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