6 Problem 10-30A Straight-line amortization of a bond discount LO 10-4 10 points During Year 1 and Year 2. Agatha Corp. completed the following transactions relating to its bond issue. The corporation's fiscal year is the calendar year Year 1 Jan. 1 Issued $240,000 of 8-year, 5 percent bonds for $234,000. The annual cash payment for interest is due on Dec. 31 Recognizes interest expense, including the straight-line amortization of the discount and made the cash payment for interest Dec. 3 closed the interest expense account. Year 2 Dec. 31 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. Dec. 31 Closed the interest expense account. Required a-1. When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? a-2. If Agatha had sold the bonds at their face amount, what amount of cash would Agatha have received? b. Prepare the liabilities section of the balance sheet at December 31, Year 1 and Year 2 c. Determine the amount of Interest expense that will be reported on the income statements for Year 1 and Year 2 d. Determine the amount of interest that will be paid in cash to the bondholders in Year 1 and Year 2 Complete this question by entering your answers in the tabs below. Required At Required A2 Required B Required cRequired D When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? Required Required A2 > Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required Required D if Agatha had sold the bonds at their face amount, what amount of cash would Agatha have received? Amount of cash Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required Required D Prepare the liabilities section of the balance sheet at December 31, Year 1 and Year 2. (Amounts to be deducted should be indicated with minus sign.) Year 1 Year 2 Liabilities Carrying value of bonds payable Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required Required D Determine the amount of interest expense that will be reported on the income statements for Year 1 and Year 2. Interest expense Year 1 Year 2 Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required Required D Determine the amount of interest that will be paid in cash to the bondholders in Year 1 and Year 2. Interest paid Year 1 Year 2