Problem 7-36A (Algo) Straight-line amortization of a bond discount LO 7-8 Duting Year 1 and Year 2, Kale Co, completed the following transactions relating to its bond issue. The company's fiscal year ends on December 31 . Year 1 Mar. I Issued $360,000 of 10 year, 7 percent bends for $354, eee. The seniannual cash paynent for interest is due on Harch 1 and Septenber 1 , beginning Septenber Year 1. Sept, 1 Recognized interest expense including the anortizotion of the discount and aade the sesianous cash payaent for interest. Dec, 31 hecognized accrued interest expense including the anortization of the discount. Year 2 Mar. I fecognized interest expense inctuding the anortization of the discount and aade the sensanhual cash paypent for interest. Sept. 1 Hecognized interest expense including the asortization of the discount and mide the sesiannuat cash paynent for interest. Dec.31 fiecognized accrued interest expense including the anortization of the discount. Required a. When the bonds were issued, was the market rate of inferest more or less than the stated rate of interest? If the bonds had sold at foce value, what amount of cash would Kale Co. have received? b. Prepare the liabilibes section of the balance sheet of December 31 , Year 1 and Year 2. c. Determine the amount of interest expense Kale would report on the income statements for Year 1 and Year 2. d. Determine the amount of interest Kale would poy to the bondholders in Year 1 and Year 2 Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Prepare the liablities section of the balance sheet at December 31, Year 1 and Year 2 . foce value, what amount of cash would Kale Co. have received? b. Prepare the IIabilities section of the balance sheet at December 31, Year 1 and Year 2. c. Determine the amount of interest expense Kale would roport on the income statements for Yoar 1 and Year 2. Determine the amount of interest Kale would poy to the bondholders in Year 1 and Year 2. Complete this question by entering your answers in the tabs below. c. Determine the amount of interest expense Kale would report on the income statements for Year 1 and Year 2 . d. Determine the amount of interest Kale would pay to the bondholders in Year 1 and Year 2