Penny Arcades, Inc., is trying to decide between the following two alternatives to finance its new $35 million gaming center:

1. Issue $35 million, 7% note.

2. Issue 1 million shares of common stock for $35 per share.

1. Assuming the note or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. (Enter your answers in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places.) Issue Note Issue Stock $ 11,000,000 $ 11,000,000 Operating income Interest expense (note only) Income before tax Income tax expense (35%) Net income $ 0 $ 0 4,000,000 5,000,000 Number of shares Earnings per share (Net income / # of shares)