Baked Spaghetti

Why I Love This Recipe
I found this recipe in one of my grandmother's old cooking magazines the summer I lived with my grandfather during college. I've since lost the original magazine, but the dish is still as popular as ever!
Ingredients You'll Need
1 cup(s) green pepper(s)
14 oz canned tomatoes
1/2 cup(s) mushroom(s)
2 oz olive(s)
2 tsp dried oregano
12 oz cooked spaghetti
2 cup(s) Kraft Finely Shredded Mild Cheddar Cheese
10 oz canned cream of mushroom soup
1/4 cup(s) water
1/4 cup(s) grated Parmesan cheese
Directions
Preheat the oven to 350 degrees.
In a large skillet cook the chopped green peppers until tender. Add tomatoes, sliced mushrooms, canned olives, and oregano. Simmer uncovered for 10 minutes.
Place half of the spaghetti in a greased 13x9x2 baking dish. Top with half of the vegetable mixture. Sprinkle with 1 cup cheddar cheese. Repeat layers.
Mix the soup and water until smooth; pour over casserole. Sprinkle with Parmesan cheese.
Bake uncovered at 350 degrees for 30-35 minutes or until heated through.