Diaz Company issued bonds with a $$84,000$ face value on January $1,$ Year $1.$ The bonds had a $6$ percent stated rate of interest and a $10-$year term. Interest is paid in cash annually, beginning December $31,$ Year $1.$ The bonds were issued at $98.$ The straight$-$line method is used for amortization.

Required

Use a financial statements model like the one shown next 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.