Alexi Co. issued $2.20 million face amount of 5%, 10-year bonds on June 1, 2019. The bonds pay interest on an annual basis on May 31 each year

a. Assume that the market interest rates were slightly higher than 5% when the bonds were sold. Would the proceeds from the bond issue have been more than, less than, or equal to the face amount?

b-1. Independent of your answer to part a, assume that the proceeds were $1,845,000. Use the horizontal model to show the effect of issuing the bonds. Indicate the financial statement effect. (Enter your answers in whole dollars, not in millions. Enter decreases with a minus sign to indicate a negative financial statement effect.)