Reference no: EM132496361

The following amortization and interest schedule reflects the issuance of 10-year bonds by Sweet Corporation on January 1, 2011, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly.

Amortization Schedule  Year    Cash Interest   Amount   Unamortized   Carrying   Value

1/1/2011                      $10,402                 $ 173,698

2011                             $20,251                  $20,844                        9,809                   174,291

2012                           20,251                      20,915                        9,145                          174,955

2013                              20,251                20,995                8,401                175,699

2014                               20,251                    21,084                       7,568                    176,532

2015                                  20,251               21,184                   6,635                    177,465

2016                                       20,251                    21,296                 5,590                    178,510

2017                                        20,251                    21,421                4,420                          179,680

2018                                          20,251                     21,562                     3,109                180,991

2019                                           20,251                     21,719                  1,641                        182,459

2020                                              20,251                 21,892                184,100

Question (a) Indicate whether the bonds were issued at a premium or a discount.

Question (b) Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method.

Question (c) Determine the stated interest rate and the effective-interest rate. (Round answers to 0 decimal places, e.g. 18%.)

Question (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2011. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Question (e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2011. (Interest is paid January 1.) (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Question (f) On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2018. Sweet Corporation does not use reversing entries. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)