The following amortization and interest schedule reflects the issuance of $10-$year bonds by Capulet Corporation on January $1,2019,$ and the subsequent interest payments and charges. The company$$s year$-$end is December $31,$ and financial statements are prepared once yearly. orepared once yearly.

Instructions

a$.$ Indicate whether the bonds were issued at a premium or a discount and how you can determine this fact from the schedule.

b$.$ Indicate whether the amortization schedule is based on the straight$-$line method or the effective$-$interest method, and how you can determine which method is used.

c$.$ Determine the stated interest rate and the effective$-$interest rate.

d$.$ On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January $1,2019.$

e$.$ On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for $2019.($Interest is paid January $1.)$

f$.$ On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for $2026.$ Capulet Corporation does not use reversing entries.

Amortization Schedule

Year

$$

Cash

$$

Interest

$$

Amount Unamortized

$$

Carrying Value

$1/1/2019$

$$5,651$

$$94,349$

$2019$

$$11,000$

$$11,322$

$5,329$

$94,671$

$2020$

$11,000$

$11,361$

$4,968$

$95,032$

$2021$

$11,000$

$11,404$

$4,564$

$95,436$

$2022$

$11,000$

$11,452$

$4,112$

$95,888$

$2023$

$11,000$

$11,507$

$3,605$

$96,395$

$2024$

$11,000$

$11,567$

$3,038$

$96,962$

$2025$

$11,000$

$11,635$

$2,403$

$97,597$

$2026$

$11,000$

$11,712$

$1,691$

$98,309$

$2027$

$11,000$

$11,797$

$894$

$99,106$

$2028$

$11,000$

$11,894$

$100,000$

Instructions

Indicate whether the bonds were issued at a premium or a discount and how you can determine this fact from the schedule.

Indicate whether the amortization schedule is based on the straight$-$line method or the effective$-$interest method, and how you can determine which method is used.

Determine the stated interest rate and the effective$-$interest rate.

On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January $1,2019.$

On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for $2019.($Interest is paid January $1.)$

On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for $2026.$ Capulet Corporation does not use reversing entries.