Case Questions

casee title: Caterpillar Inc. Taps the Chinese Bond Market

answer the questions in frmal financial method with supporting figures and numbers, percentages with explananing and in texe ciatation APA $6$th edition

$1.$ What are they using bonds in China for?

$2.$ What is a dim sum bond?

$3.$ What funding alternatives, other than such bonds, could Caterpillar have pursued?

$4.$ Assume that on July $1,2019,$ the company issued a $1$ billion $3-$year bond with annual coupon rate of $4\mathrm{.}8\%,$ an annual effective rate of $5\mathrm{.}0\%,$ and interest to be paid semiannually. Was this bond issued a face value, at a premium over face value, or at a discount from face value? Explain briefly, and without any computations.

$5.$ What entry will the company make to record that issuance of bonds?

$6.$ What entry will the company make to record the semiannual interest payment on December $31,2019?$ On June $30,2020?$

$7.$ What amount will be presented on the company$$s balance sheet as of December $31,2020,$ for the bond?

$8.$ Over the life of the bond, $($a$)$ what is the total amount of interest expense that will be reported in the company$$s income statements? And $($b$)$ what is the total amount of cash paid for interest?

$9.$ Assume that on December $31,2020,$ the market value of Caterpillar$$s dim sum bond issuance is $999$ million. How would that affect the carrying amount on the balance sheet at this date?