14.

On January 1, 2024, Reyes Recreational Products issued $120,000, 8%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $112,244 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, 2026, by each of the two approaches.

5. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30, 2026, for $12,000 of the bonds?

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Record interest expense on June 30,2026 , by the straight-line method. Note: Enter debits before credits. Prepare an amortization schedule by the straight-line method. Note: Do not round intermediate calculations. Enter your answers in whole dollars. Record interest expense on June 30,2026 , by the effective interest method. Note: Enter debits before credits. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30,2026 , for $12,000 of the bonds? Note: Round your intermediate calculations and final answer to the nearest whole dollar. Prepare an amortization schedule that determines interest at the effective interest rate. Note: Enter your answers in whole dollars