The Square Foot-Grill, Inc issued $203,000 of 10 -year, 7 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 afinancial statements model like the one shown below to demonstrate how (1) the January 1 , Your 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 premilam) of the bond liabality as of December 31 . Year t c. Determine the amount of interest expense reported on the Year 1 income statenent. 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. Use a fnancial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, band issue and (2) the December 31, Year 1, recognition of interest expense, including the arnortization of the premulam and the cash payment, affects the company's finariciat statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. (In the Cash Flow column, andicate whether the item is an operating activity (OA), ah investing activity (1A), or a financing octivity (FA) ond if thete is no effect, leave the cell biank Not all cells will regulfe entry.) The Square Foot-Grill, Inc issued $203,000 of 10 -year, 7 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 afinancial statements model like the one shown below to demonstrate how (1) the January 1 , Your 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 premilam) of the bond liabality as of December 31 . Year t c. Determine the amount of interest expense reported on the Year 1 income statenent. 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. Use a fnancial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, band issue and (2) the December 31, Year 1, recognition of interest expense, including the arnortization of the premulam and the cash payment, affects the company's finariciat statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. (In the Cash Flow column, andicate whether the item is an operating activity (OA), ah investing activity (1A), or a financing octivity (FA) ond if thete is no effect, leave the cell biank Not all cells will regulfe entry.)
