The questions below are based on Rite Aid annual financial statements (10-K) for fiscal year 2009 (the year ended February 27, 2010). You can download the annual reports (10-K) from SEC website:
*Consider the 9.375 % senior secured notes due December 2015. Assume that interest is paid annually.
- Using the financial effects template, record the annual interest expense for the year ended February 27, 2010. Note that there is a cash and noncash portion to interest expense on these notes because they were issued at a discount. The noncash portion is the amortization of the discount during the year.
- Compute the total rate of interest (i.e. the effective interest rate for the Total interest expense) recorded for fiscal year 2009 for these notes.