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 $$310,000$ of $10-$year, $6$ percent bonds for $$298,000.$

The annual cash payment for interest is due on December $31.$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.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.Requireda$-1.$ 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 $2.$