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

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 company closes its books on December $31$ of each year. Prepare the statements using a vertical statements format. $($Hint: Record each year$$s transactions in T$-$accounts prior to preparing the financial statements.$)$