The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2008, 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

1/1/2008 0 0 $51,945 $ 155,055

2008 $20,700 $23,258 49,387 157,613

2009 20,700 23,642 46,445 160,555

2010 20,700 24,083 43,062 163,938

2011 20,700 24,591 39,171 167,829

2012 20,700 25,174 34,697 172,303

2013 20,700 25,845 29,552 177,448

2014 20,700 26,617 23,635 183,365

2015 20,700 27,505 16,830 190,170

2016 20,700 28,526 9,004 197,996

2017 20,700 29,704 0 207,000

(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. 38,548.) 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, 2008. (Round answers to 0 decimal places, e.g. 38,548. 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, 2008

(e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2008. (Interest is paid January 1.) (Round answers to 0 decimal places, e.g. 38,548. 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, 2008

(f) On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2015. Capulet Corporation does not use reversing entries. (Round answers to 0 decimal places, e.g. 38,548. 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, 2015 December 31, 2015