I need help answering and understanding exercise 7.35 question g of the book what the numbers means version 11.

which event is more likely to occur? Explain your answer. & Assume the same facts as in parte. Would the market value of Corless Co's debenture bonds be more than or less than the $800,000 reported amount? Is this good news or bad news to the management of Corless Co.? Analysis of long-term debt Assume that Home and Office City, Inc., provided the following comparative data concerning long-term debt in the notes to its 2017 annual less Co. and convertible by its bondholders, the debenture bonds When the Serial Bonds account decreased during the year, what other account was affected, and how was it affected? Use the horizontal model (or write the journal entry) to record the effect of this transaction. Case 7.35 LO 5, 7, 8 report amounts in millions): December 31, 2017 December 31, 2016 $1,103 in 2017 500 246 216 180 Convertible Subordinated Notes, due October 1, 2018: converted into shares of common stock of the Company at a conversion price of $15.3611 per share in October 2017... 64% Senior Notes, due September 15, 2021; interest payable semiannually on March 15 and September 15 beginning Commercial Pape wighted average interest rate of 4.8% at January 1, 2015 Capital Lease Orsations, payable in varying installments through January 31, 2044..... Installment Notes Payable; interest imputed at rates between 5.2% and 10.09. payable in varying installments through 2035 Unsecured Bank Loan; floating interest rate averaging 6.05% in fiscal 2017 and 5.90% in fiscal 2016; payable in August 2019. Variable-Rate Industrial Revenue Bonds: secured by letters of credit or land; interest rates averaging 2.9% during fiscal 2017 and 3.8% during fiscal 2016: payable in varying instaliments through 2027 Total long-term debt Less current installments Long-term debt, excluding current installments 45 27 15 15 3 $779 29 9 $1,580 14 $1,566 $750 Required: a. As indicated, Home and Office City's 34% Convertible Subordinated Notes were converted into shares of common stock in October 2017. How many shares of stock were issued in conversion of these notes? b. Regarding the 69% Senior Notes, Home and Office City, Inc., also disclosed that "The Company, at its option, may redeem all or any portion of the Senior Notes by notice to the holder. The Senior Notes are redeemable at a redemption amount of the Senior Notes to be redeemed or (2) the sum of the present valus 268 Part 1 Financial Accounting price, plus accrued interest, equal to the greater of (1) 100% of the principal of the remaining scheduled payments of principal and interest on the Senior Notes to maturity." Redeemable fixed-rate notes, such as those described here are similar to callable term bonds. Thinking of the 692% Senior Notes on this basis, would it have been possible for Home and Office City, Inc., to redeem ("call") these notes for an amount 1. Below face value (at a discount)? 2. Above face value (at a premium)? 3. Equal to face value (at par)? What circumstances would have been most likely to prompt Home and Office City to redeem these notes? Recall from the discussion of Cash and Cash Equivalents in Chapter 5 that commercial paper is like an IOU issued by a very creditworthy corporation. Home and Office City's note disclosures concerning commercial paper reveal that "The company has a backup credit facility with a consortium of banks for up to $800 million. The credit facility contains various restrictive covenants, none of which is expected to materially impact the company's liquidity or capital resources." What do you think is meant by this statement? d. What other information would you have wanted to know about Home and Office City's "Capital Lease Obligations" when making an assessment of the com- pany's overall liquidity and leverage? e. Regarding the "Installment Notes Payable," what is meant by "interest imputed at rates between 5.2% and 10%"? f. Why do you suppose that Home and Office City's "Unsecured Bank Loan" was immaterial in relation to the company's total long-term debt? g. Note that the current installments" due on Home and Office City's long- term debt were immaterial in amount for both years presented. Based on the data presented in this case, explain why this is likely to change over the next five years. NSWERS TO that Does It Mean? 1. It means that interest on the loan is subtracted from the principal of the loan the difference is made available for the borrower's use. 2. It means that if liabilities are und