The following account balances were extracted from the general ledger of Richmond Corporation on January 1, 19X7: 12% secured bonds 9% debenture bonds Premium on secured bonds Discount on debenture bonds $200,000 100,000 1,000 3,000 Monthly amortization of premium and discount amounts to $20 and $50, respectively. Instructions a A study of the company's accounts reveals the presence of both secured bonds and debenture bonds. All other things being equal, would an investor prefer secured bonds or debenture bonds? Briefly explain. Sec b Determine the company's net bond liability to investors on January 1, 19X7. c Prepare the proper balance sheet disclosure for the bond issues out- standing as of December 31, 19X7. C.V= $298. d Explain the need for discount and premium amortization. e Which of the two bond issues (secured or debenture! has a contract interest rate that is less than the effective rate? Briefly explain.