Redmond Company has one asset, a bond issued by Issuing Company that Redmond purchased $($on the day it was issued, December $30$ of Year $1)$ as an investment. Redmond also has only one liability, one of its own bonds that was issued to finance the purchase of the Issuing Company Bond investment. This bond was also issued on December $30$ of Year $1.$ Julian Mark, the sole owner of Redmond Company, was able to cleverly start the company with no initial shareholder investment of cash, but he is still the legal owner of the company. Both bonds have the same terms: $$1,000$ face value, $30-$year life, $8\%$ coupon rate, and single interest payments made at the end of each year $($starting with December $31$ of Year $2).$ On their issuance dates, both bonds were associated with a market interest rate of $8\%.$ As a result, the issuance price of both bonds was $$1,000.$ Redmond Company has decided to account for both the bond asset and the bond liability using the fair value option.

On December $31$ of Year $1,$ one day after the bonds were issued, some very bad news came out about Redmond Company. Redmond was unable to obtain key building permits, throwing all of Redmond$$s expansion plans into chaos. Given this suddenly$-$increased risk, the market interest rate associated with Redmond$$s bonds payable increased from $8\%$ to $23\%$ overnight. The market interest rate associated with the Issuing Company bond $($owned by Redmond Company$)$ stayed at $8\%.$

On December $30$ of Year $1,$ the owner$$s equity amount for Redmond Company is $$0$; all of the financing to obtain the $$1,000$ bond investment asset was obtained through the issuance of the Redmond Company bond liability. On December $31,$ AFTER the increase in the market interest rate associated with the Redmond Company bond liability, what is the owner$$s equity amount for Redmond Company?

Positive $$349$

Positive $$651$

Negative $$651$

Negative $$349$