Flounder Company sells 10% bonds having a maturity value of $2,020,000 for $1,874,375. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1.

A. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.

B. Set up a schedule of interest expense and discount amortization under the effective-interest method. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 38,548.)

Schedule of Discount Amortization Effective-Interest Method
Year		Interest Payable		Interest Expense		Discount Amortized		Carrying Amount of Bonds
Jan. 1, 2020		$		$		$		$
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2024