The Argyle Company acquired a $10 million face value bond that has an 8% coupon rate (pays interest annually on December 31) on January 1, 2017. The bond matures on December 31, 2022. On January 1, 2017, the market yield for bonds of equivalent risk and maturity was 6%. 

Required:

a. How much did Argyle pay for this bond on January 1, 2017?

b. On December 31, 2017, the market yield for bonds of equivalent risk and maturity is 7%. What would be the market value of this bond on December 31, immediately after the coupon payment on that date?

c. On December 31, 2018, the market yield for bonds of equivalent risk and maturity is 8%. What would be the market value of this bond on December 31, immediately after the coupon payment on that date?

d. Assume one of three scenarios: the bond is to be (i) amortized cost, (ii) FVOCI, or (iii) FVPL:

■  How much would the balance sheet value of this bond be on December 31, 2017, and December 31, 2018?

■  How much income would be reported in 2017 and 2018 for this bond?

■  How much would OCI and accumulated OCI be for fiscal years 2017 and 2018?