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The following amortization and interest schedule reflects the issuance of 11-year bonds by Capulet Corporation on January 1, 2008, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly.

Amortization Schedule

Year

Cash

Interest
Amount
Unamortized
Carrying
Value
1/1/2008




$10,836
$ 171,664
2008
$20,075
$20,600
10,311
172,189
2009
20,075
20,663
9,723
172,777
2010
20,075
20,733
9,065
173,435
2011
20,075
20,812
8,328
174,172
2012
20,075
20,901
7,502
174,998
2013
20,075
21,000
6,577
175,923
2014
20,075
21,111
5,541
176,959
2015
20,075
21,235
4,381
178,119
2016
20,075
21,374
3,082
179,418
2017
20,075
23,157


182,500

(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


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