Chapter 14, Problem 14.38BE

Financial Statement Disclosure. Use the following excerpt from the financial statements of Fixet Company’s debt footnote (from Fixet Company’s 2018 annual report) to answer these questions:

1. a. At December 31, 2018, what is the amount of the current portion of long-term debt?
2. b. How much debt will mature over the next 5 years?
3. c. What would be the difference in liabilities if Fixet reported the debt at fair values?

Fixet Company

Note 9—Long-Term Debt [Excerpt]

Long-term debt net of unamortized premiums and discounts and swap fair value adjustments is comprised of the following:

In millions of U.S. dollars	December 31, 2018
5.66% Corporate bond, payable July 23, 2020	$ 27.0
5.4% Corporate bond, payable August 7, 2020	16.1
4.7% Corporate bond, payable October 1, 2021	50.0
5.15% Corporate bond, payable December 15, 2023	110.4
4.3% Japanese yen note, payable June 26, 2025	1177
1.52125% Japanese yen note, payable February 14, 2020	55.1
Total	376.3
Less current maturities	7.4
Non Current Portion	$368.9

The scheduled maturity of long-term debt m each of the years ending December 31, 2019, through 2023, is $7.4 million $172.1 million, $57.4 million $47.4 million, and $7.3 million at face value, respectively.

The Company’s long-term debt is recorded at adjusted cost, net of amortized premiums and discounts The fair value of long-term debt is estimated based upon quoted prices for similar instruments The fair value of the Company’s long-term debt including the current portion, was approximately $403 million at December 31, 2018.