A Walt Disney annual report contained the following note:
The Company issued 100 billion (approximately $ 920 million) of Japanese yen bonds through a public offering in Japan. The bonds are senior, unsecured debt obligations of the Company, which mature in June 2019. Interest on the bonds is payable semi- annually at a fixed interest rate of 5% per year through maturity. The bonds provide for principal payments in dollars and interest payment in Japanese yen.
Required:
1. Describe how this bond would be reported on the statement of financial position.
2. Explain why you think management borrowed money in this manner.