On January 1, Year 1, Parker Company issued bonds with a face value of $79,000, a stated rate of interest of 10 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 12 percent at the time the bonds were issued. The bonds sold for $73,304. Parker used the effective interest rate method to amortize the bond discount.

Required

1. Prepare an amortization table.
2. At what amount would the bond liability appear on the Year 4 balance sheet?
3. What item and amount in the table would appear on the Year 4 income statement?
4. On the Year 4 statement of cash flows (Direct Method)? Under which section of the statement of cash flows would this item appear?

Prepare an amortization table. (Make sure that the unamortized discount equals to 'O' and the Carrying value equals to face value of the bond in the last period. Round the intermediate calculations and answers to the nearest whole dollar amount.) Amortization Schedule Cash Interest Payment Expense Discount Amortization Carrying Value 73,304 74,201 7,900 8,797 897 January 1, Year 1 December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 December 31, Year 5 Totals b. At what amount would the bond liability appear on the Year 4 balance sheet? c. What item and amount in the table would appear on the Year 4 income statement? d. On the Year 4 statement of cash flows (Direct Method)? Under which section of the statement of cash flows would this item appear? (Round the intermediate calculations and answers to the nearest whole dollar amount. For requirement d, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA).) Show less b. Carrying value bond liabilities C. d