The Square Foot Grill, Incorporated issued $290,000 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. SQUARE FOOT GRILL, INCORPORATED Balance Sheet (Partial) As of December 31 Liabilities Net carrying value of bonds Total liabilities Year 1 Year 2