1.Was this bond repurchase economically a good idea for Parker? How much of an economic (not accounting) gain or loss did they make on the repurchase? Was this economic gain or loss reflected in the journal entry in #6? If not, why not?

2. Assume that the market price on 6/30/10 was 108. What is the market rate for the Parker bonds at that date?

. On December 31, 2008 Peter Parker Adhesives issues $600,000 of 15 year, 10% bonds. The bonds pay interest semiannually on December 31st and June 30th. The bonds have a call provision which allows Parker to repurchase them at a price of 105 any time after the first year. The market yield for the bonds at the date of issue is 11%. Parker pays $30,000 in issuance costs. Parker has a December 31st year end. Parker calls the bonds on 10/31/10, four months after the 6/30/10 coupon payment is made. . On December 31, 2008 Peter Parker Adhesives issues $600,000 of 15 year, 10% bonds. The bonds pay interest semiannually on December 31st and June 30th. The bonds have a call provision which allows Parker to repurchase them at a price of 105 any time after the first year. The market yield for the bonds at the date of issue is 11%. Parker pays $30,000 in issuance costs. Parker has a December 31st year end. Parker calls the bonds on 10/31/10, four months after the 6/30/10 coupon payment is made