Problem 14-1 The following amortization and interest schedule reflects the issuance of 10-year bonds by Sunland Corporation on January 1, 2011, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Amount Unamortized Carrying Value Year Cash Interest 1/1/2011 $9,318 $155,582 2011 $18,139 $18,670 8,787 156,113 2012 18,139 18,734 8,192 156,708 2013 18,139 18,805 7,526 157,374 2014 18,139 18,885 6,780 158,120 2015 18,139 18,974 5,945 158,955 2016 18,139 19,075 5,009 159,891 2017 18,139 19,187 3,961 160,939 2018 19,313 18,139 2,787 162,113 2019 18,139 19,454 1,472 163,428 2020 18,139 19,611 164,900 (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. (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.) (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 and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) no entry is required, select "No Entry" for the acCount titles Account Titles and Explanation Date 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. Sunland 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.) Account Titles and Explanation Date Debit Credit Click if you would like to Show Work for this question: Open Show Work
