On January 1, 2014, Cunningham Corporation issued $219,000 in bonds that mature in 6 years. The bonds have a stated interest rate of 5 percent and pay interest on December 31. When the bonds were sold, the market rate of interest was 9 percent. The company uses the effective-interest method. By December 31, 2014, the market rate of interest had increased to 13 percent.

1. What amount of bond liability is recorded on January 1, 2014?

2. What amount of interest expense is recorded on December 31, 2014?

4. Determine the impact of these transactions at year-end on the debt-to-equity ratio and times interest earned ratio.