During Year 1 and Year 2, Agatha Corporation completed the following transactions relating to its bond issue. The corporation's fiscal year is the calendar year. Year 1 January 1 Issued $250,000 of 10-year, 6 percent bonds for $241,000. The annual cash payment for interest is due on December 31. December 31 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest December 31 Closed the interest expense account. Year 2 December 31 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. December 31 Closed the interest expense account. Journal entry worksheet 2 3 4 5 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. Note: Enter debits before credits. Date General Journal Debit Credit December, Year1 Interest expense Discount on bonds payable Cash 15,000 Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 Closed the interest expense account. Note: Enter debits before credits.. Date December, Year 1 5 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. General Journal Debit Credit Note: Enter debits before credits. Date December, Year 2 Interest expense Discount on bonds payable Cash 15,000 Record entry Clear entry View general journal Journal entry worksheet < 2 3 Closed the interest expense account. Note: Enter debits before credits. Date December, Year 2 5 General Journal Debit Credit Req A1 Req A2 Req B Req C Req D Req E Prepare the liabilities section of the balance sheet at December 31, Year 1 and Year 2. (Amounts to be deducted should be Indicated with minus sign.). Year 1 Year 2 Liabilities Bonds payable $ 250,000 $ 250,000 Less: Discount on bonds payable Carrying value of bonds payable $ 250,000 $ 250,000 Req A1 Req A2 Req B Req C Req D Req E Determine the amount of interest expense that will be reported on the income statements for Year 1 and Year 2. Interest Expense Year 11 Year 2 Req A1 Req A2 Req B Req C Req D Req E Determine the amount of interest that will be paid in cash to the bondholders in Year 1 and Year 2. Interest Paid Year 1 Year 2 Reg D Ben E.