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The Square Foot Grill, Incorporated issued $$250,000$ of $10-$year, $7$ 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 $2.$