Cyprus Corporation issued $150,000 of bonds on January 1, 2003, to raise funds to buy some special machinery. The maturity date of the bonds is January 1, 2008, with interest payable each January 1 and July 1. The stated rate of interest is 10%. When the bonds were sold, the effec- tive rate of interest was 12%. The company’s financial reporting year ends December 31. 1. Determine the price at which the bonds would be sold. 2. Prepare the amortization schedule using the effective-interest method. 3. Prepare a comparative schedule of interest expense for each year (2003-2008) for the effective-interest and straight-line methods of amortization. 4. Record the journal entry for the last payment using the amortization schedule in (2): Record the journal entry for the retirement of the bonds. 6. Interpretive Question: Is the difference between the interest expense each year between the straight-line and effective-interest methods sufficient to require the use of the effective- interest method? How do you think this question would be answered in practice?