What was the effective interest rate

Assignment Help Financial Accounting

Reference no: EM132661224

Problem 1: Determine the total coupon payments on these notes during Fiscal 2011?

Problem 2: Determine the total interest expense recognized in respect of these notes during Fiscal 2011?

Problem 3: At the date of issue, what was the effective interest rate, or equivalently market interest rate, on these notes per compounding period? Work to two decimal places when stated as a percentage (e.g., 9.36%). Hint: Consider using the Rate formula in Excel.

Problem 4: Prepare the journal entries to recognize interest expense in respect of these notes for the six month periods ending August 2010 and February 2011. Assume an effective rate of 4.86235% per compounding period; this level of precision is needed to reconcile the changes in the carrying value of the bonds between the end of fiscal 2010 and fiscal 2011.

Some of Rite Aid's debt is publicly traded. In NOTE 20, Financial Instruments, Rite Aid disclosed its Fixed rate indebtedness at February 26, 2011 as having a carrying amount of $4,654,549 and a fair value of $4,544,974.

Reference no: EM132661224

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