Exercise 1015 A (Algo) Straight-line amortization of a bond premium LU IU-2 The Square Foot Geill, incorporated issued $242,000 of 10 -year, 5 percent bonds on January 1, Year 2, at 102, Interest is payable in cash annually on December 31. The straight-line method is used for amortization. Required a. Use a financial statements model to demonatrate how (1) the January 1, Year 2, bond issue and (2) the Decernber 31, Year 2, recognition of interest expense, including the amortization of the premilum and the cash payment, affects the company's financial statements. b. Determine the carrying value fface value less discount of plus premium) of the bond llability 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 liablify as of December 31 . Year 3. e. Determine the amount of interest expense reported on the Year 3 income statement. Complete this question by entering your answers in the tabs below. Use a financal atatements model to demonstrate how (1) the January 1 , year 2 , bond issue and (2) the becember 31 , Year 2 , recognition of interest expense, induding the amortiaation of the premium and the cash payment, affects the company's financlal statements. Note: Use + for increase or - for decrease. in the 5 tatement of Cash Flows columin, use the initials on to designate operating activity, 1A for investing activity, and FA for finaning activity. Not all celis require inbut