Prepare journal entry to record the total interest expense

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Given Rite Aid's substantial debt burden and large interest expense, it is important when evaluating the firm's performance to understand the earnings and cash flow implications of the its long-term debt. Thus, consider the following four questions.

Consider the 8.00% senior secured notes (first lien) due August 2020. Assume interest is paid semiannually.

Problem a) What is the face value, or equivalently principal amount, of these notes?

Problem b) Prepare the journal entry that Rite Aid made when these notes were issued.

Problem c) Prepare the journal entry to record the total interest expense recognized in respect of these notes during Fiscal 2011?

Reference no: EM132661216

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