Marriott International Inc. (NASDAQ: MAR; Bethesda, MD; hereafter, Marriott or the Company) is a worldwide operator, franchisor, and licensor of hotels and timeshare properties under numerous brand names at different price and service points, including the Ritz-Carlton, BVLGARI, and Courtyard by Marriott. The Company became a public company in 1998 when it was spun off as a separate entity by the company formerly named Marriott International, Inc.

Use the attached financial statements and selected notes to the financial statements from Marriotts 10-K for the year ended December 31, 2014 to answer the following questions. (You will not need to supplement with outside sources of company data in order to answer the questions.)

http://www.annualreports.com/HostedData/AnnualReportArchive/m/NASDAQ_MAR_2014.pdf (paste URL)

The Companys Long-Term Debt footnote (not attached) includes the following information: In the 2013 third quarter, we issued $350 million aggregate principal amount of 3.4 percent Series M Notes due 2020 (the Series M Notes). We received net proceeds of approximately $345 million from the offering, after deducting the underwriting discount and estimated expenses. We pay interest on the Series M Notes on April 15 and October 15 of each year, commencing on April 15, 2014.

These Series M Notes are described as:

Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%)

(a)What journal entry would have been recorded in the third quarter of 2013 to record the issuance of the Series M Notes?

b) Record the interest payment and interest expense on April 15 and October 15, 2014. Assume the

effective interest method, and record your responses to the nearest thousand dollars.

April 15:

October 15:

c) Assume that, at the end of 2014, the prevailing market rate for interest obligations similar to these notes was 4.0%. What would be the approximate net carrying or book value of the notes at the year end? Explain.