uring Year $1$ and Year $2,$ Agatha Corporation completed the following transactions relating to its bond issue. The corporations fiscal ear is the calendar year.

rear $1$

January $1$ Issued $$300,000$ of $10-$year, $6$ percent bonds for $$294,00.$ The annual cash payment for interest is due on becember $31.$ December $31$ Recognized interest expense, including the straight$-$line amortization of the discount, and made the cash payment for interest.

$$ecember $31$ Closed the interest expense account.

Year $2$

$$ecember $31$ Recognized interest expense, including the straight$-1$ine amortization of the discount, and made the cash payment for interest.

December $31$ Closed the interest expense account.

Required

$0-1.$ When the bonds were issued, was the market rate of Interest more or less than the stated rate of interest?

e$-2.$ If Agatha had sold the bonds at their face amount, what amount of cash would Agatha have recelved?

b$.$ Prepare the liabilitles section of the balance sheet at December $31,$ Year $1$ and Year $2.$

c$.$ Determine the amount of interest expense that will be reported on the income statements for Year $1$ and Year $2.$

d$.$ Determine the amount of interest that will be pald in cash to the bondholders in Year $1$ and Year $2.$

Complete this question by entering your answers in the tabs below.

$$ Flequired A$2$ Required B

ReSJodC $$ Required $D$

Prepare the liabilities section of the balance sheet at December $31,$ Year $1$ and Vear $2.$

Note: Amounts to be deducted should be indicated with minus sign.