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On January 1, 2018, Bradley Recreational Products issued $200,000, 8%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were

On January 1, 2018, Bradley Recreational Products issued $200,000, 8%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $187,074 to yield an annual return of 10%. (FV of $1,PV of $1,FVA of $1,PVA of $1,FVAD of $1andPVAD of $1)(Use appropriate factor(s) from the tables provided.)

Required:

1.Prepar an amortization schedule that determines interest at the effective interest rate.

2.Prepar an amortization schedule by the straight-line method.

3.Prepare the journal entries to record interest expense on June 30, 2020, 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, 2020, for $20,000 of the bonds?

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