Please help me answer these financial reporting questions. Homework questions. The first picture is the questions, and the other three are financial statements that may be used to solve the problems.
Attached please nd Balance Sheet, Income Statement, and Footnote 3 on Debt from Chesapeake Energy Corp.'s 2017 Annual Report. Note that Columns 1 and 3 are principal (par) amounts, while columns 2 and 4 are carrying (NBV = Net Book Value) amounts. Answer the following questions. Assume annual compounding. 1. Show the interest payment joumal entry for 5.5% convertible senior notes due in 2026 (13lh row in the footnote). 2. What is the effective r% on these notes? 3. Calculate the ratio of Total Long-tem liabilities/Total Chesapeake Stockholders' Equity 4. Assume that the bonds in #1 were swapped for equity at par, at year-end. Recalculate the ratio in #3. Ignore taxes. 5. For the purposes of this question, assume that the NBVs of the 5.5% convertible bond in the footnote include only the bond part (i.e., the NBV already excludes the equity part, and this equity part is already included in OIE), so the effective r% you calculated in #2 is the r% for a straight bond (i.e., without conversion option); because of the conversion option, the bond was issued at par at 5.5%, so the difference between Par and NBV is the equity part. Calculate the ratio of Total Long-tem liabilities/Total Chesapeake Stockholders' Equity, assuming that the equity part was NOT excluded, so that the NBV of the bond was its par amount, and none of the bond was recorded as equity. [i.e., this is the usual was it is recorded] CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31. 2017 2016 (5 In millions) CURRENT ASSETS: Cash and cash equivalents ($2 and $1 attributable to our VIE) ................ $ 5 $ 882 Aooounts receivable. net ........................................................................... 1.322 1.057 Short-tenn derivative assets .. ................................................. 27 Other current assets ............... 171 203 Total Current Assets ......................................................................... 1 .525 2.142 PROPERTY AND EQUIPMENT: Oil and natural gas properties. at cost based on full cost accounting: Proved oil and natural gas properties ($468 and $488 attributable to our VIE) ............................................ 68.858 66.451 Unproved properties ............................................................................. 3.484 4.802 Other property and equipment ............................................................. 1,986 2.053 Total Property and Equipment. at Cost ............................................. 74.328 73.306 Less: accumulated depreciation. depletion and amortization (($461) and ($458) attributable to our VIE) ............................................ (63.664) (62.726) Property and equipment held for sale. net 16 29 Total Property and Equipment. Net .................................................. 10.680 1 0.609 LONG-TERM ASSETS: Other Iong-tenn assets ............................................................................. 220 277 TOTAL ASSETS ........................................................................................... $ 12,425 $ 13.028 CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - (Continued) CURRENT LIABILITIES: Aocou nts payable ..................................................................................... Current maturities of long-term debt, net .................................................. Accrued interest ........................................................................................ Short-term derivative liabilities .................................................................. Other current liabilities ($3 and $3 attributable to our VIE) ....................... Total Current Liabilities ..................................................................... LONG-TERM LIABILITIES: Long-term debt, net .................................................................................. Long-term derivative liabilities ,. Asset retirement obligations. net of current portion . Other long-term liabilities ...... - Total Long-Tenn Liabilities ................................................................ CONNGENCIEs AND COMMITMENTS (Note 4) EQUITY: Chesapeake Stockholders' Equity: Preferred stock, $0.01 par value, 20,000,000 shares authorized: 5.603.458 and 5,839,506 shares outstanding ................................... Common stock. $0.01 par value. 2,000,000,000 and 1,500,000,000 shares authorized: 908,732,809 and 896,279,353 shares issued ................................... Additional paid-in capital ...................................................................... Accumulated decit .............................................................................. Accumulated other comprehensive loss ............................................... Less: treasury stock. at cost; 2,240,394 and 1,220,504 common shares ........................................ Total Chesapeake Stockholders' Equity (Decit) ............................ Nonoontrolling interests ............................................................................ Total Equity (Decit) ....................................................................... TOTAL LIABILITIES AND EQUITY .............................................................. $ $ December 31 . 2017 ($ In millions) 654 $ 52 1 37 58 1 .455 2,356 9,921 162 354 10.441 1.671 9 14,437 (16,525) (57) (31) (496) 124 (372) 12,425 $ 2015 672 503 1 1 S 562 1 ,798 3,648 9.938 1 5 247 383 1 0,583 1,771 9 14,486 (17,474) (95) (27) (1,331) 128 (1,203) 13,028 CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. Debt Our long-term debt consisted of the following as of December 31. 2017 and 2016: December 31. 2017 December 31. 2016 _ Principal Carrying Principal Carrying Amount Amount Amount Amount (5 in millions) 6.25% euro-denominated senior notes due 2017 ......................... $ $ - $ 258 $ 258 5.5% senior notes due 2517... 134 134 7.25% senior notes due 2018 ........... 44 44 64 64 Floating rate senior notes due 2019 ................ 380 380 380 380 6.625% senior notes due 2020 ........................ 437 437 780 780 6.875% senior notes due 2020 ........................ 227 227 279 278 6.125% senior notes due 2021 ........................ 548 548 550 550 5.375% senior notes due 2021 ........................ 267 267 270 270 4.875% senior notes due 2022 ........................ 451 451 451 451 8.00% genior secured second lien notes due I 2022 .......................................................... 't .416 1.895 2,419 3.409 5.75% senior notes due 2023 .......................... 338 338 338 338 8.00% senior notes due 2025 .......................... 1.300 1.290 1,000 985 5.5% convertible senior notes due 2025\"\". 1.250 337 1,250 511 8.00% senior notes due 2027 .......................... 1.300 1.298 2.75% comment convertible senior notes due 20351 ................................................... 2 2 2.3363ggntingent convertible senior notes due 114 1 1 2 2.215% contiggent convertible senior notes us 2038 ................................................ 9 8 . 200 180 Term loan due 2021 ........................................ 1.233 1.233 1.500 1.500 Revolving credit facility .................................... 781 781 Debt issuance costs ........................................ (63) (64) Interest rate derivatives ................................... 2 '3 Total debt. net ...... . .................................. 9.981 9.97 9.989 10.441 Less current maturities of long-ten'n debt. net") ............................................................. (53) (52) (506) (503) Total long-term debt. net ......................... $ 9.928 $ 9.921 $ 9.483 $ 9.938
