Problem 14-1 The following amortization and interest schedule reflects the issuance of 10-year bonds by Vaughn 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 Schedule Amount Unamortized Carrying Value Year Interest 1/1/2011 2011 $22,270 2012 2013 2014 2015 2016 2017 2018 2019 2020 22,270 22,270 22,270 22,270 22,270 22,270 22,270 22,270 22,270 $25,022 25,435 25,910 26,456 27,084 27,806 28,636 29,591 30,689 31,956 $55,885$166,815 169,567 172,732 176,372 180,558 185,372 190,908 197,274 204,595 213,014 222,700 53,133 49,968 46,328 42,142 37,328 31,792 25,426 18,105 9,686 (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 accoun enter O 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 for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 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. Vaughn Corporation does not use reversing entries. (If no ent 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 r Account Titles and Explanation Debit Credit