The Square Foot Grill, Incorporated issued $$243,000$ of $10-$year, $9$ percent bonds on January $1,$ Year $2,$ at $102.$ Interest is payable in cash annually on December $31.$ The straight$-$line method is used for amortization.

 

 

Required

Determine the carrying value $($face value less discount or plus premium$)$ of the bond liability as of December $31,$ Year $2.$

Determine the amount of interest expense reported on the Year $2$ income statement.

Determine the carrying value of the bond liability as of December $31,$ Year $3.$

Determine the amount of interest expense reported on the Year $3$ income statement.

Answer rating: 100% (QA)

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