During Year 1 and Year 2. Kale Co completed the following transactions relating to its bond issue. The company's fiscal year ends on December 31 Year 1 Mar. 1 Issued 3560,000 of 10 year, 7 percent bonds for $954,000. The semiannual cash payment for interest 1 due on March and September 1, beginning September Year 1. Sept. 1 Recognised interest expense including the orization of the discount and made the semiannual cash payment for interest Dec.31 Recognized accrued Interest expense including the mortization of the discount. Year 2 Mar. 1 Recognized Interest expense including the amortization of the discount and made the sewin cash payment for interest Sept. 1 Recoprired interest expense including the mortation of the discount and made the seat cash payment for interest Dec.31 Recognized accrued interest expense including the montiration of the discount. Required a. When the bonds were issued, was the market rate of interest more or less than the stated rate of interest if the bonds had sold at face value, what amount of cash would Kale Co. 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 Kale would report on the income statements for Year 1 and Year 2 d. Determine the amount of interest Kale would pay to the bondholders in Year 1 and Year 2 KALE CO. Balance Sheet (Partial) As of December 31 Year 1 Year 22 Liabilities 360,000 Interest payable Bonds payable Less. Discount on bonds payable Carrying value of bonds payable Total liabilities $ 6,300 X 360 000 50 X 359.950 $ 366 250 $ 50 X 359.950 359.950 c. Determine the amount of interest expense kale would report on the income statements for Year 1 and Year 2 d. Determine the amount of interest Kale would pay to the bondholders in Year 1 and Year 2 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A Regs Reg C and D c. Determine the amount of interest expense Kale would report on the income statements for Year 1 and Year 2. d. Determine the amount of interest Kale would pay to the bondholders in Year 1 and Year 2. Year 1 22.050 Year 2 $ 26,460 C Interest expenso Interest pald d