The Square Foot Grill, Inc. issued $200,000 of 10 year, 6 percent bonds on January 1, Year 1, at 102. Interest is payable In cash annually on December 31. The straight-line method is used for amortization Required a. Use a financial statements model like the one shown below to demonstrate how (the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. b. Determine the carrying value (face value less discount or plus premium of the bond ability as of December 31, Yeart c. Determine the amount of Interest expense reported on the Year 1 income statement d. Determine the carrying value of the bond liability as of December 31, Year 2 .. Determine the amount of Interest expense reported on the Year 2 income statement ook Complete this question by entering your answers in the tabs below. Req Retot Terences Use a financial statements modelice the one shown below to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use for increase, - for decrease, and if there is no effect, leave the call bank in the Cash Flow column, indicate whether them Is an operating activity (OA), an investing activity (A), or a financing activity (FA) and there is no effect, leave the cell bank. Not all cells will require entry) Chew SQUARE FOOT GRILL, INC Efect of Transactions on Financial Statements Balance sheet Income Statement Sockholder Net hcome Event No Statement DOS 2 S 4 3 % 5 & 6 * 8 9 0 W E R . Y C C O S D F G H J K K c V B B N. MacBook o FI 52 80 F3 F5 F7 # 3 2 $ 4 % & 5 December 31, Year 1, recognition of Interest expense, Including the amortization of the premium and the cash payment, affect company's financial statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of Interest expense reported on the Year 1 Income statement d. Determine the carrying value of the bond liability as of December 31, Year 2. e. Determine the amount of Interest expense reported on the Year 2 income statement Complete this question by entering your answers in the tabs below. ReqA Req B to E b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of interest expense reported on the Year 1 Income statement d. Determine the carrying value of the bond liability as of December 31, Year 2 e. Determine the amount of interest expense reported on the Year 2 income statement. Show less b. Carrying value Your 1 c. Interest expense Your 1 d. Carrying value Year 2 Interest expense Your 2 (RA 20 F3 . 6 A 2 $ 4 3 5 & 7 6 8 W E R T Y U
