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E10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Discount and Determining Reported Amounts LO10-4 On January 1 of this year, Ikuta Company issued a bond with a face value of $125,000 and a coupon rate of 8 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 9 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 Book Value Date Interest Expense Bond Jan. 01, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 S 10,000 S 10,000 S 10,000 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Year 1 Year 2 Interest expense Bond liability