Cagney Company sold $200,000 of bonds on July 1, 2018. A portion of the amortization table appears below.

Required:
1. Indicate the stated interest rate on these bonds.
2. Calculate the effective annual interest rate on these bonds.
3. Determine the interest expense and discount amortization for the interest period ending December 31, 2020.
4. Determine the liability balance after the interest payment is recorded on December 31, 2020.

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Discount on Bonds Payable (Credit) Discount on Bonds Payable Balance $2, 340 2,050 Carrying Cash Payment Interest Expense (Debit) $9,277 Period Value (Credit) 12/31/19 $277 290 ? $9,000 $197,660 197,950 06/30/20 9,290 12/3 1/20