Exercise $10-15$A $($Algo$)$ Straight$-$line amortization of a bond premium LO $10-5$

The Square Foot Grill, Incorporated issued $$229,000$ of $10-$year, $9$ percent bonds on January $1,$ Year $2,$ at $102.$ Interest is payable ir cash annually on December $31.$ The straight$-$line method is used for amortization.

Required

a$.$ Use a financial statements model to demonstrate how $(1)$ the January $1,$ Year $2,$ bond issue and $(2)$ the December $31,$ Year $2,$ recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financi statements.

b$.$ Determine the carrying value $($face value less discount or plus premium$)$ of the bond liability as of December $31,$ Year $2.$

c$.$ Determine the amount of interest expense reported on the Year $2$ income statement.

d$.$ Determine the carrying value of the bond liability as of December $31,$ Year $3.$

e$.$ Determine the amount of interest expense reported on the Year $3$ income statement.

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Req B to $E$

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.

Determine the carrying value of the bond liability as of December $31,$ Year $3.$

Determine the amount of interest expense reported on the Year $3$ income statement.

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b$.$ Carrying value