In year B, Haloute Co. issues $100,000 in 10% bonds to yield 12%. Although the bonds have a bond date of July 1, year A, and don't mature for 10 years. Haloute Co. re-purchases the bonds on 12/31/F, their FYE, incurring $200 in brokerage fees.

A.) Calculate the net book value of the bonds on 12/31/F. [93357]

B). Calculate the market value of the bonds (using the "partial interest" method) on 12/31/F, assuming the bonds are currently priced to yield 14% (don't forget to include accrued interest). [92307]. Provide the 12/31/F entry to repurchase and extinguish the bonds [gain: 5850]

C) Repeat b, assume the market price o the bonds is determined using the "real interest" method. [net book value, including accrued interest: 92238; gain: 5919]

D) How would the above answers differ if the bonds were repurchased and held "in treasury" rather than extinguished? [dr "Treasury Bonds"]