Dynamic Games Incorporated issued $500,000 of five-year, 5 percent bonds on January 1, Year 2, at 103. Interest is payable in cash annually on December 31. The straight-line method is used for amortization. Required: Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 2. Determine the amount of interest expense reported on the Year 2 income statement.

Dynamic Games Incorporated issued $500,000 of five-year, 5 percent bonds on January 1, Year 2 , at 103 . Interest is payable in cash annually on December 31 . The straight-line method is used for amortization. Required: a. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 2. b. Determine the amount of interest expense reported on the Year 2 income statement