Problem 14-1 The following amortization and interest schedule reflects the issuance of 10-year bonds by Teal Corporation on January 1, 2011, and the subsequent interest payments and charges. The companys year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Year Cash Interest Amount Unamortized Carrying Value 1/1/2011 $5,719 $ 95,481 2011 $11,132 $11,458 5,393 95,807 2012 11,132 11,497 5,028 96,172 2013 11,132 11,541 4,619 96,581 2014 11,132 11,590 4,161 97,039 2015 11,132 11,645 3,648 97,552 2016 11,132 11,706 3,074 98,126 2017 11,132 11,775 2,431 98,769 2018 11,132 11,852 1,711 99,489 2019 11,132 11,939 904 100,296 2020 11,132 12,036 101,200 (a) Indicate whether the bonds were issued at a premium or a discount. (b) Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. (c) Determine the stated interest rate and the effective-interest rate. (Round answers to 0 decimal places, e.g. 18%.) The stated rate % The effective rate % (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2011. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2011 (e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2011. (Interest is paid January 1.) (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2011 (f) On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2018. Teal Corporation does not use reversing entries. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit