Diaz Company issued $$114,000$ face value of bonds on January $1,$ Year $1.$ The bonds had a $6$ percent stated rate of interest and a ten$-$year term. Interest is paid in cash annually, beginning December $31,$ Year $1.$ The bonds were issued at $98$Complete this question by entering your answers in the tabs below.

Req A

Req $B$ to $E$

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 $($face value less discount or plus premium$)$ of the bond liability as of December $31,$ Year $2.$

e$.$ Determine the amount of interest expense reported on the Year $2$ income statement.. 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 discount and the cash payment, affect the company$$s financial statements.

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 $($face value less discount or plus premium$)$ of the bond liability as of December $31,$ Year $2.$

E$.$ Determine the amount of interest expense reported on the Year $2$ income statement