1. What is the impact on Netflix’s assets, liabilities, and equity from its new credit line?
Original blog posting (August 30, 2017)

2. Netflix, Inc.
In July 2017, Netflix obtained a $500 million credit line from five lenders (including Deutsche Bank) for operations and working capital

3. Question 1
On the date that the lenders authorized the credit line of $500 million for Netflix, what would be the impact on Netflix’s assets, liabilities, and equity?

4. Question 2
Assume now that Netflix borrows $100 million cash against this credit line on December 31, How will its assets, liabilities, and equity be impacted by this borrowing?

5. Question 3
How would the balance sheet (assets, liabilities, and equity) of Deutsche Bank AG be impacted when Netflix borrows cash through the credit line?

6. Question Recap
On the date that the lenders authorized the credit line of $500 million for Netflix, what would be the impact on Netflix’s assets, liabilities, and equity?
Assume now that Netflix borrows $100 million cash against this credit line on December 31, How will its assets, liabilities, and equity be impacted by this borrowing?
How would the balance sheet (assets, liabilities, and equity) of Deutsche Bank AG be impacted when Netflix borrows cash through the credit line?

7. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at