Problem 14-1 The following amortization and interest schedule reflects the issuance of 10-year bonds by Sage 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 $25,496 $ 76,104 2011 $10,160 $11,416 24,240 77,360 2012 10,160 11,604 22,796 78,804 2013 10,160 11,821 21,135 80,465 2014 10,160 12,070 19,225 82,375 2015 10,160 12,356 17,029 84,571 2016 10,160 12,686 14,503 87,097 2017 10,160 13,065 11,598 90,002 2018 10,160 13,500 8,258 93,342 2019 10,160 14,001 4,417 97,183 2020 10,160 14,577 101,600 (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. Sage 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 Click if you would like to Show Work for this question: Open Show Work