Completing a Bond Amortization Table (Effective Interest Rate)

Cagney Company sold \(\$ 200,000\) of bonds on June 30, 2018. A portion of the amortization table appears below.

\section*{Required:}
1. Indicate the stated interest rate on these bonds.
2. Calculate the effective annual interest rate on these bonds. (Note: Round to the nearest \(0.1 \%\).)
3. Determine the interest expense and discount amortization for the interest period ending December 31, 2020. (Note: Round to the nearest dollar.)
4. Determine the liability balance after the interest payment is recorded on December 31, 2020.
Exercise

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Discount on Bonds Payable Balance (Debit) $2,340 2,050 Bond Payable Carrying Value (Credit) $197,660 197,950 Cash Interest Payment Expense Discount on Bonds Period (Credit) (Debit) Payable (Credit) . 12/31/19 $9,000 $9,277 $277 06/30/20 9.000 9,290 290 12/31/20 ? ?