Peer Review

How does Amazon’s redemption of its notes payable impact its financial statements?

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Reviewed:: Dec 1, 2020 by Business

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Ratings

Overall Rating:

Content Quality:

Effectiveness:

Ease of Use:

Overview:

This is a case study about Amazon corporation that involves the payment of Notes Payable. It connects the financial accounting concepts of long-term liabilities and expenses with financial statements. It is clear, concise, and an effective way to connect the abstract concept of long-term liabilities to a real-world setting.

The questions ask about the financial accounting treatment of the bond redemption, including the amount of the cash payment, classification of the bonds as an asset or liability, impact on the balance sheet of the redemption, and how much interest expense Amazon should recognize. No solutions or examples are provided.

Type of Material:

Case Study

Recommended Uses:

In class
Homework assignment
Individual work
Team discussion

Technical Requirements:

Chrome and Edge used, but this case study should work with any internet browser.

Identify Major Learning Goals:

Determine the amount Amazon would pay to redeem Notes Payable
Distinguish which accounting categories would be appropriate in the transactions
Analyze the effect on Amazon’s Balance Sheet
Compute the interest expense saved by early redemption of the Notes

Target Student Population:

Business,
Accounting,
Finance
Undergraduate

Prerequisite Knowledge or Skills:

Basic knowledge of business financial statements, accounting for bonds and classification of assets and liabilities on the balance sheet.

Content Quality

Rating:

Strengths:

This is an excellent real-world case study of Amazon that will help students connect the concepts of Notes Payable and Interest Expense to the company’s financial statements.
Blog post is clear and concise and presents a relevant topic that is recent and would be of interest to students
Blog post and questions provide accurate information and could be used in many different academic settings
It poses a significant “what if” question that companies encounter regularly.
The case study allows students to consider the impact of notes payable reduction and can lead to further financial statement analysis.

Concerns:

Blog post does not provide a complete demonstration of the topic of bond accounting or demonstrate a core concept of financial accounting on its own
Material is very short and does not summarize the topic or integrate any other financial accounting topics
Should be used in conjunction with other textbook material or in class lecture

Potential Effectiveness as a Teaching Tool

Rating:

Strengths:

This case study builds on concepts presented when learning about long-term liabilities.
It reinforces concepts and extends the learning to include the balance sheet in an efficient manner.
It connects the concepts of Notes Payable and Interest Expense to financial statements efficiently and effectively.
Easy to integrate into a homework assignment or short case study
Students could complete in-class, very quickly

Concerns:

The learning material does not reinforce concepts progressively, or build on prior concepts
No learning objectives, solutions or student assessment provided
Material does not demonstrate relationships between concepts presented, or provide any linkage to core accounting concepts in financial accounting
The blog post on its own cannot be used to measure student learning outcomes

Ease of Use for Both Students and Faculty

Rating:

Strengths:

This case study is very easy to use and has clear instructions.
Since it uses Amazon, it is engaging for students.
The design of the case study is appealing and can be used without the internet, if desired.
Questions are clear and could be objectively evaluated if solutions provided
Material is accessible to any student with an internet browser

Concerns:

Blog post is not engaging, interactive or visually appealing
Material does not provide context or description of the key accounting concepts presented

Other Issues and Comments:: This blog post introduced along with the corresponding textbook chapter material, or other exhibits to explain the core accounting concepts, would be very useful to a beginning student in Financial Accounting.
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