Reference no: EM133022996
Question - On January 1, 2021, Bradley Recreational Products issued $120,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $116,122 to yield an annual return of 10%.
Required -
1. Prepare an amortization schedule that determines interest at the effective interest rate.
2. Prepare an amortization schedule by the straight-line method.
3. Prepare the journal entries to record interest expense on June 30, 2023, by each of the two approaches. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
4. Record interest expense on June 30, 2023, by the effective interest method.
Record interest expense on June 30, 2023, by the straight-line method.
5. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30, 2023, for $12,000 of the bonds?
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