On January 1, 2024, Reyes Recreational Products issued $125,000, 10%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $117,237 to yield an annual return of 12%.

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 12%, what price would a second investor pay the first investor on June 30, 2026, for $15,000 of the bonds?

Prepare an amortization schedule that determines interest at the effective interest rate. Note: Enter your answers in whole dollars. repare an amortization schedule by the straight-line method. Note: Do not round intermediate calculations. Enter your answers in whole dollars