Arlington Corp Issued $7,000,000, 5% 6-Year Bonds on January 1

Arlington Corp issued $7,000,000, 5% 6-year bonds on January 1, 2019 at par. Interest is due annually on December 31. The market rate of interest has since increased dramatically to 9%. As such, Arlington can repurchase its bonds on the open market for $6,507,449. They decided to take advantage of this situation, and on January 1, 2023 issued a new series of bonds in the amount of $6,507,449 [two-year bonds, 9% interest payable annually]. The bonds were sold at par and the proceeds were used to retire the 5% bonds.
Entry for sale of new bonds Arlington has recorded a gain on the retirement which increases its net income for the year. Ignoring transaction costs and taxation effects, is Arlington any better off? Discuss.

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