7 10 The Square Foot Grill, Inc. issued $234,000 of 10-year, 5 percent bonds on January 1, Year 1, at 102. Interest is payable in cash annually on December 31. The straight-line method is used for amortization, Required a. Use a financial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of interest expense reported on the Year 1 income statement d. Determine the carrying value of the bond liability as of December 31, Year 2 e. Determine the amount of interest expense reported on the Year 2 income statement Complete this question by entering your answers in the tabs below. Req Reg B to 7 Reg A Reg B to E Use a financial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31 Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use for increase, - for decrease, and if there is no effect, leave the cell blank. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and if there is no effect, leave the cell blank. Not all cells will require entry.) Show less Print SQUARE FOOT GRILL, INC. Effect of Transactions on Financial Statements Balance Sheet Income Statement Event No. Assets - Liabilities + Stockholders Equity Statement of Cash Flow Revenue Net Income Expense - 1 2a 2b e. vetermine ine amount or interest expense reported on the rear 2 income statement 7. Complete this question by entering your answers in the tabs below. Reg A Req B to E Book b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of interest expense reported on the Year 1 income statement. d. Determine the carrying value of the bond liability as of December 31, Year 2. e. Determine the amount of interest expense reported on the Year 2 income statement Show less Punt References b. Carrying value Year 1 c. Interest expense Year 1 d. Carrying value Year 2 e. Interest expense Year 2 ( ReqA Rele 8. Required Use the following information to prepare a classified balance sheet for Alpha Co, at the end of Year 1. 15 points Accounts receivable Accounts payable Cash Common stock Land Long-term notes payable Merchandise inventory Retained earnings $42,610 6,150 13,180 41,000 12,000 23,500 27,000 24,140 eBook Print References ALPHA CO. Classified Balance Sheet As of December 31, Year 1 Assets Current assets 8 Assets Current assets 15 points Total current assets Property, plant and equipment eBook Print References Total property, plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Lidilles du SOCKHOIVEIS Equity Current liabilities 00 Long-term liabilities 15 points Total liabilities Stockholders' equity eBook Print References Total stockholders' equity Total liabilities and stockholders' equity