Several years ago brant, inc., sold $880,000 in bonds to the public. annual cash interest of 8 percent ($70,400) was to be paid on this debt. the bonds were issued at a discount to yield 12 percent. at the beginning of 2013, zack corporation (a wholly owned subsidiary of brant) purchased $110,000 of these bonds on the open market for $131,000, a price based on an effective interest rate of 6 percent. the bond liability had a book value on that date of $740,000. assume brant uses the equity method to account internally for its investment in zack.