. Consider Note 10, Indebtedness. How much total debt does Rite Aid have at February 28, 2004? How much of this is due within the coming fiscal year? Reconcile the total debt reported in Note 10 with what Rite Aid reports on its balance sheet.

Consider the 9.5% senior secured notes due February 2011. c. 1. What is the face value (i.e. the principal) of these notes? How do you know? d. Prepare the journal entry that Rite Aid must have made when these notes were issued. 111. Prepare the annual interest expense joumal entry. Note that the interest paid on a note during the year equals the face value of the note times the stated rate (i.e., coupon rate) of the note. iv. Prepare the joumal entry that Rite Aid will make when these notes mature in 2011.

Consider the 4.75% convertible notes due December 2006. As;mme that interest is paid annually. i. What is the face value (or principal) of these notes? What is the carrying value (net book value) of these notes? Why do the two values differ? How much interest did Rite Aid pay on these notes during the fiscal 2004? Detennine interest expense on these notes for the year ended February 28, 2004. Note that there are cash and non-cash portion to interest expense on these notes because they were issued at a discount. The non-cash portion of interest expense is the amortization of the discount during the year (that is, the amount by which the discount decreased during the year).

Corporation-Long Term Debt RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS an thousands, except per share amounts) Fel ASSETS 334,755 Cash and cash equivalents 670,004 575,518 Accounts receivable, net 2,223.17 ries 50,067 08,018 paid expenses and other current assets 3,377,997 3,243,887 Total current assets 1,883,808 1,868,579 Property, plant and equipment, ne 684,535 76,672 99,768 Other angibles, ne 6,133,515 6,246,679 assets LIABILITIES AND STOCKHOLDERS' EQUITY EFICIT) Short-tern debt and current maturities of convertible notes, 103,715 ng-term debt and lease financing obligations 755,284 758,29 payable 701,484 707,999 Accrued salaries, wages and other current liabilities 1,483,750 Total current liabilities 244,500 246,000 Convertible 3451.352 3,345,365 Long-term debt, less current maturities 69.08 Lease financing obligations, less current maturities 885,975 900,270 Other noncurrent liabilities 6.226, 6,237.15 Commitments and contingencies Redoen able prefe red stock Stockholders' equity (deficit) Preferred stock, par value $1 per share: liquidation value $100 per hare: 20,000 shares authorized: shares issued 4,178 417803 393,705 nd 3,937 Common stock, par value $1 per share: 000,000 shares authorized 515,115 shares issued and outstanding 516 196 and 515.115 516,496 3,133.277 Additional paid-in capital. (4,035,433) ed defici tock based and deferred compensation 879 Accumulated other comprehensive loss 9.264 112 290 tal stockholders' equity (defici 6,133,515 6,246,679 Total liabilities and stockholders' equity (deficit). The accompanying notes are an integral part of these consolidated financial statements. -192. 191. Corporation-Long Term Debt RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS an thousands, except per share amounts) Fel ASSETS 334,755 Cash and cash equivalents 670,004 575,518 Accounts receivable, net 2,223.17 ries 50,067 08,018 paid expenses and other current assets 3,377,997 3,243,887 Total current assets 1,883,808 1,868,579 Property, plant and equipment, ne 684,535 76,672 99,768 Other angibles, ne 6,133,515 6,246,679 assets LIABILITIES AND STOCKHOLDERS' EQUITY EFICIT) Short-tern debt and current maturities of convertible notes, 103,715 ng-term debt and lease financing obligations 755,284 758,29 payable 701,484 707,999 Accrued salaries, wages and other current liabilities 1,483,750 Total current liabilities 244,500 246,000 Convertible 3451.352 3,345,365 Long-term debt, less current maturities 69.08 Lease financing obligations, less current maturities 885,975 900,270 Other noncurrent liabilities 6.226, 6,237.15 Commitments and contingencies Redoen able prefe red stock Stockholders' equity (deficit) Preferred stock, par value $1 per share: liquidation value $100 per hare: 20,000 shares authorized: shares issued 4,178 417803 393,705 nd 3,937 Common stock, par value $1 per share: 000,000 shares authorized 515,115 shares issued and outstanding 516 196 and 515.115 516,496 3,133.277 Additional paid-in capital. (4,035,433) ed defici tock based and deferred compensation 879 Accumulated other comprehensive loss 9.264 112 290 tal stockholders' equity (defici 6,133,515 6,246,679 Total liabilities and stockholders' equity (deficit). The accompanying notes are an integral part of these consolidated financial statements. -192. 191