of 101. The firm decides to refund the bonds by selling a new 6%
bond issue to mature in 5 years. Hurst begins to reacquire its 8%
bonds in the market and is able to purchase $500,000 worth at 101.
The remainder of the outstanding bonds is reacquired by exercising
the bonds’ call feature. In the final analysis, how much was the gain
or loss experienced by Hurst in reacquiring its 8% bonds? (Assume
the firm used straight-line amortization.) Show calculations.
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