How much cash would amazon have to pay to redeem the notes

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Reference no: EM132710230

Amazon.com (NASDAQ: AMAZON) recently redeemed $1 billion of its2.6% notes payable one month before the maturity date. "Redeemed"means that Amazon paid cash to the note holders for the principal amount of the notes and the interest accrued up to the redemption date.

Questions

Problem 1. Assume that, on the date of redemption, it had been two months since Amazon had paid interest on these notes (i.e., there was two months of accrued interest on the notes.) How much cash would Amazon have to pay to redeem these notes?

Problem 2. Were these notes assets or liabilities for Amazon? Were these notes assets or liabilities for the note holders?

Problem 3. How would Amazon's balance sheet be impacted by the redemption?How would its income statement be impacted by the redemption?

Problem 4. How much interest expense did Amazon save by redeeming these notes one month before the maturity date?

Reference no: EM132710230

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