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{The following information applies to the questions displayed below.] The Square Foot Grill, Inc. issued $200,000 of 10-year, 6 percent bonds on July 1, Year 1, at 102. Interest is payable in cash semiannually on June 30 and December 31. The straight-line method is used for amortization.

b. Prepare the liabilities section of the balance sheet at the end of Year 1 and Year 2. (Amounts to be deducted should be indicated with minus sign.)