In its 2021 annual report to shareholders, Health Foods, Inc., disclosed the following information about some...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In its 2021 annual report to shareholders, Health Foods, Inc., disclosed the following information about some of its indebtedness: The fair value of convertible subordinated debentures is estimated using quoted market prices. Book amounts and estimated fair values of our financial instruments other than those for which book amounts approximate fair values as noted above are as follows (in thousands) 2021 2020 Estimated Fair Value $295,923 Estimated Fair Value Book Amount Book Amount Convertible subordinated debentures $158,791 $151,449 $200, 396 In addition, the company disclosed the following: We have outstanding zero coupon convertible subordinated debentures which had a book amount of approximately $158.8 million and $151.4 million at September 26, 2021, and September 28, 2020, respectively. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2035, of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.64 shares per $1,000 principal amount at maturity, representing 3,285,632 shares. The debentures may be redeemed at the option of the holder on March 2, 2025, or March 2, 2030, at the issue price plus accrued original discount totaling approximately $188 million and $241 million, respectively. Required: What amount of interest expense will Health Foods accrue on the debentures during fiscal year 2022? Interest expense in the year of 2022 In its 2021 annual report to shareholders, Health Foods, Inc., disclosed the following information about some of its indebtedness: The fair value of convertible subordinated debentures is estimated using quoted market prices. Book amounts and estimated fair values of our financial instruments other than those for which book amounts approximate fair values as noted above are as follows (in thousands) 2021 2020 Estimated Fair Value $295,923 Estimated Fair Value Book Amount Book Amount Convertible subordinated debentures $158,791 $151,449 $200, 396 In addition, the company disclosed the following: We have outstanding zero coupon convertible subordinated debentures which had a book amount of approximately $158.8 million and $151.4 million at September 26, 2021, and September 28, 2020, respectively. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2035, of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.64 shares per $1,000 principal amount at maturity, representing 3,285,632 shares. The debentures may be redeemed at the option of the holder on March 2, 2025, or March 2, 2030, at the issue price plus accrued original discount totaling approximately $188 million and $241 million, respectively. Required: What amount of interest expense will Health Foods accrue on the debentures during fiscal year 2022? Interest expense in the year of 2022
Expert Answer:
Related Book For
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Posted Date:
Students also viewed these accounting questions
-
Market research has revealed the following information about the market for chocolate bars: The demand schedule can be represented by the equation QD = 1,600 300P, where QD is the quantity demanded...
-
An analyst gathers the following information about Meyer, Inc.: Meyer has 1,000 shares of 8% cumulative preferred stock outstanding, with a par value of $100, and liquidation value of $110. Meyer has...
-
The municipality of Lossburgh reported the following information about its pension fund in its CAFR, for the year ended June 30, 2013: Net Assets Held in Trust for Pension Benefits ........$...
-
You expect that Bean Enterprises will have earnings per share of $3 for the coming year. Bean plans to retain all of its earnings for the next three years. For the subsequent two years, the firm...
-
Graphs of four equations are shown in Fig. 135. State whether m and b are positive, negative, zero, or undefined for the y = mx + b form of each equation. y. (a) (b)
-
Can the availability and the representativeness heuristics operate simultaneously? Why or why not?
-
For Problem 6.8, (a) Fit the corresponding negative binomial model with the same linear predictor. (b) Compare the analysis between part (a) and that from Problem 6.8. 6.8 For the Sexual Health pilot...
-
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,000 kayaks during 2013. Each kayak will require 54 pounds...
-
K Use appropriate formulas to find (a) the perimeter and (b) the area of the figure. 8.8 m 5 m 5.2 m 7 m (a) The perimeter is (Type an integer or a decimal.)
-
. Venture Inc. is sitting on $100 million in liquidity and considering investing in two different start-ups: Company A and Company B. After 3 years, Venture plans to sell their stake in both...
-
Dani Corporation has 5.5 million shares of common stock outstanding. The current share price is $83, and the book value per share is $5. The company also has two bond issues outstanding. The first...
-
On 1 July 2021 the finance department of Wollongong Council entered into a contract with IBM Pty Ltd for the provision of services by Peter Hank, an expert computer programmer who is nominated in the...
-
if we replace the Creative Directors with data-driven processes, as was Peck's call, and given our understanding of consumer behavior, then what is it that data adds in this industry? At the same...
-
Melissa is 35 years old. She receives a $3,000 long-term disability payment from an accident insurance plan paid for by her employer. What amount will she need to include as income on her tax return?
-
You are a value investor and you want to find stocks that are out of favor. From the list below, select 20 stocks that you believe offer the best value and growth potential over the next 10-20 years....
-
Are the giant fibers uniform along their length? Is conduction velocity in each fiber uniform along the length of the worm, or does it vary from one end to another? Explain.
-
The current market size of the addressable market is INR 500 crores of Gross merchandise value (@ MRP) of goods sold. And this market is expected to grow at 3% per annum for next 10 years. The...
-
What is taxable income, and what is the formula for determining taxable income?
-
Marvin Turner was discussing summer employment with Tina Song, president of Motown Construction Service: Tina: Im glad that youre thinking about joining us for the summer. We could certainly use the...
-
Obtain a copy of your college or Universitys student code of conduct. In group of three or four, answer the following question: 1. Compare this code of conduct with the accountants Codes of...
-
All-Around Sound Co. discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods, such as computers, digital cameras, and other electronic items...
-
Explain the error in this interpretation of inflation data: In the 12-month period ending in December of 1980, consumer prices rose by 12.4 percentafter a 13.3 percent increase the year before....
-
Answer this letter to Ann Landers: Ive read your column for ages and almost always agree with you. One subject on which we do not see eye-to-eye, however, is senior citizens driving. According to the...
-
Identify the error in Table 3.10, showing consumer prices and the change in prices based on a price index equal to 100 in 2000. Table 3.10 Year Price Index Change from Previous Year Change from 2000...
Study smarter with the SolutionInn App