Note: Our second case assignment for the quarter is the Harvard Business School Brief Case about Lyons Document Storage Corporation. Please go to our class website and buy the Harvard Case, but then use the following modification for you analysis and discussion. Please attach the copy of the Harvard case to your submission so that I will know that you purchased it. I think you’ll find this to be a little more straightforward presentation of the key issues.

Lyons Document Storage Corporation:
Bond Accounting.

In December 2014, Rene Cook sat in her cubicle trying to remember what she had learned in business school about bonds and bond accounting. Ms. Cook, a new MBA and special assistant in a training assignment with the company president, had just met with David Lyons, president of Lyons Document Storage Corporation. He had asked her to think about the possible consequences of repurchasing company bonds outstanding using cash that he felt could be obtained by issuing new bonds with a lower interest rate. My Lyons had asked Rene to focus on how much the company’s annual interest payments could be reduced, how reported earnings would be affected, and how the refunding would change the company’s financial position as referenced on the balance sheet, if at all.

The Company

The Lyons Company was a family business in the stationary supply business until the document storage opportunity appeared in the early 1990’s. Lyons Document Storage Corporation was incorporated in 1993 to compete in the emerging and rapidly growing industry that provides secure, off-site storage of documents for other corporate customers. The demand for storage was fueled by the need for corporations to retain records of sales contracts, employment records, compliance records, and other documents. The convenience of secure storage and easy recovery in professionally managed