On January 1 of this year, Ikuta Company issued a bond with a face value of $145,000 and a coupon rate of 7 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 8 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)

Required:

1. Complete a bond amortization schedule for all three years of the bond's life.

Cash Interest Interest Expense Discount Amortization Book Value of Bond Date Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2 December 31 Year 1 Interest expense Bond liability Year 2