January 24, 2020 
During 2020, Twitter, Inc. (NYSE: TWTR) will be issuing (approximately) $600 million of unsecured notes that will be due in 2027. Assume that on the day immediately before the note issuance, Twitter has assets of $10,500 million and liabilities of $3,370 million.
Questions
- Will the notes be classified as assets or liabilities on Twitter’s balance sheet? Will these notes be Notes Receivable or Notes Payable?
- When Twitter issues these notes in 2020, will the notes be classified as current or long-term??
- On the day that these notes are issued, will Twitter’s current ratio be impacted? If so, will it increase or decrease?
- Calculate Twitter’s debt ratio before and after the notes issuance, using the assumed balances given in the story. Will Twitter’s debt ratio increase, decrease, or remain the same after the note issuance?
Copyright 2020 Wendy M. Tietz, LLC
Accounting in the Headlines 
Thank you. This is clear and not too complex for the student.
Thanks:)
Very interesting case. My students did well with this one with the exception of question 3 – that was a little more thought provoking. Stay healthy.
Thanks, Kate! Yes, you stay safe too.