On Jan of 2005, company purchases $100million of 3 year bond maturing in 2008. They plan to hold until maturity. The bond pays 1% interest in 2005…

On Jan of 2005, company purchases $100million of 3 year bond maturing in 2008. They plan to hold until maturity. The bond pays 1% interest in 2005 and end year for a fair market value of $105million.

Effect on 2005: Pretax Income =

Total assets =

Equity =