During 2011 and 2012, Yue Corp. completed the following transactions relating to its bond issue. The corporation's fiscal year is the calendar year.

Required

a. When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? If Yue had sold the bonds at their face amount, what amount of cash would Yue have received?

b. Prepare the general journal entries for these transactions.

c. Prepare the liabilities section of the balance sheet at December 31, 2011 and 2012.

d. Determine the amount of interest expense that will be reported on the income statements for 2011 and 2012.

e. Determine the amount of interest that will be paid in cash to the bondholders in 2011 and 2012 .