Oz Company was started when it issued bonds with a $500,000 face value on January 1 , Year 1 . The bonds were issued for cash at 96 . Oz uses the straight-line method of amortization. They had a 20 -year term to maturity and an 8 percent annual interest rate. Interest was payable on December 31 of each year. Oz Company immediately purchased land with the proceeds (cash received) from the bond issue. Oz leased the land for $60,000 cash per year. On January 1, Year 4 , the company sold the land for $500,000 cash. Immediately after the sale of the land, Oz redeemed the bonds at 98 . Assume that no other accounting events occurred during Year 4. Required Prepare an income statement, statement of changes in equity, balance sheet, and statement of cash flows for the Year 1 , Year 2 , Year 3 , and Year 4 accounting periods. Assume that the company closes its books on December 31 of each year. Prepare the statements using a vertical statements format. (Hint: Record each year's transactions in T-accounts prior to preparing the financial statements.) Complete this question by entering your answers in the tabs below. Assume that the company closes its books on December 31 of each year. Prepare an income statement for the Year 1 , Year 2 , Year 3 , and Year 4 accounting periods. (Enter amounts to be deducted with a minus sign.) Or Company was started When it issued bonds with a $500.000 face value on January 1. Year 1. The bonds were issued tor eash at 96 . Oz uses the straightiline method of amortization. They had a 20 .year term to maturity and an 8 percent annual interest rate. Interest was payable on December 31 of each year. Oz Company iminediately purchased land with the proceeds (cash recelved) from the bond issue. Oz leased the Innd for $60.000 cash por year. On January 1, Year 4 , the company sold the land for $500.000 cash. Immediately ofter the sale of the land, Oz redeemed the bonds at 98 . Assume that no other accounting events occurred during Year 4 . Required Prepare an income statement, statement of changes in equity, balance sheet, and statement of cash flows for the Year 1, Year 2, Year 3, and Yoar 4 accounting periods. Assume that the company closes its books on December 31 of each yoar. Prepare the statements using a vertical statements format. (Hint Record each year's transactions in Traccounts peior to preparing the financial statements) Complete this question by entering your answers in the tabs below. Assume that the company closes its books on December 31 of each year. Prepare an income statement for the Year 1 , Year 2 , Year 3, and Year 4 accounting periods. (Enter amounts to be deducted with a minus sign.)
