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question 5 At December 31, 2021, Newman Engineering's liabilities include the following: 1. $22 million of 10% bonds were issued for $22 million on May

question 5

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At December 31, 2021, Newman Engineering's liabilities include the following: 1. $22 million of 10% bonds were issued for $22 million on May 31,1999 . The bonds mature on May 31,2029 , but bondholders have the option of calling (demanding payment on) the bonds on May 31, 2022 . However, the option to call is not expected to be exercised, given prevailing market conditions. 2. $26 million of 9% notes are due on May 31,2022 . A debt covenant requires Newman to maintain current assets at least equal to 187% of its current liabilities. On December 31,2021 . Newman is in violation of this covenant. Newman obtained a waiver from National City Bank until June 2022, having convinced the bank that the company's normal 2 to 1 ratio of current assets to current liabilities will be reestablished during the first half of 2022 . 3. \$19 million of 12% bonds were issued for $19 million on August 1, 1989. The bonds mature on July 31,2022 Sufficient cash is expected to be available to retire the bonds at maturity. Required: Classify the above mentioned debts as current liabilities or noncurrent liabilities. Also, provide corresponding value for the same. (Enter your answers In millions (I.e., 10,000,000 should be entered as 10).)

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