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The Square Foot Grill, Inc. issued $200,000 of 10-year, 6 percent bonds on January 1, 2018,...

The Square Foot Grill, Inc. issued $200,000 of 10-year, 6 percent bonds on January 1, 2018, at 102. Interest is payable in cash annually on December 31. The straight-line method is used for amortization.

Interest expense is $11,600

  1. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, 2018.
  2. Determine the carrying value of the bond liability as of December 31, 2019.
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Answer are highlighted in yellow: Solution: Face value Add: Premium on bonds (200000*2%)/10*9 Carrying value of bond liabilit

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