OZ Company was started when it issued bonds with a $500,000 face value on January 1, Year 1. The bonds were issued for cash at 96. OZ uses the straight-line method of amortization. They had a 20-year term to maturity and an 8 percent annual interest rate. Interest was payable on December 31 of each year. OZ Company immediately purchased land with the proceeds (cash received) from the bond issue. OZ leased the land for $60,000 cash per year. On January 1, Year 4, the company sold the land for $500,000 cash. Immediately after the sale of the land, OZ redeemed the bonds at 98. Assume that no other accounting events occurred during Year 4.

Required
a. Record the events associated with this bond for Year 1, Year 2, Year 3, and Year 4. Total the amounts in each account at the end of each year.
b. Prepare an income statement, statement of changes in equity, balance sheet, and statement of cash flows for the Year 1, Year 2, Year 3, and Year 4 accounting periods. Assume that the companies fiscal year ends on December 31 of each year.