Exercise 1014A (Algo) Straight-line amortization of a bond discount LO 104 Dlaz Company issued bonds with a $104,000 face value on January 1, Year 1 . The bonds had a 8 percent stated rate of interes and a 10-year term. Interest is paid in cash annually, beginning December 31 , Year 1 . The bonds were issued at 98 . The straight line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1 , bond issue and (2) th December 31, Year 1, recognition of interest expense, including the amortization of the discount and the cash payment, affec the company's financial statements. Note: Use + for increase or - for decrease. In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Not all cells require input. b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31 , Year 1. c. Determine the amount of interest expense reported on the Year 1 income statement. d. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31 , Year 2 . e. Determine the amount of interest expense reported on the Year 2 income statement