The following amortization and interest schedule is for the issuance of 10-year bonds by Capulet Corporation on January 1, 2017 and the subsequent interest payments and charges. The company's year end is December 31 and it prepares its financial statements yearly.

(a) Indicate whether the bonds were issued at a premium or a discount and explain 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 explain how you can determine which method is used. Are both amortization methods accepted for financial reporting purposes?
(c) Determine the stated interest rate and the effective interest rate.
(d) Based on the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2017.
(e) Based on the schedule above, prepare the journal entry(ies) to reflect the bond transactions and accruals for 2017. (Interest is paid January 1.)
(f) Based on the schedule above, prepare the journal entry(ies) to reflect the bond transactions and accruals for 2025. Capulet Corporation does not use reversing entries?

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Amortization Schedule Year Cash Amount Unamortized $5,651 5,329 4,968 4,564 4,112 3,605 3,038 2,403 1,691 Interest Carrying Amount Jan. 1, 2017 Dec. 31, 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 $11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 $11,322 11,361 11,404 11,452 11,507 11,567 11,635 11,712 11,797 11,894 $ 94,349 94,671 95,032 95,436 95,888 96,395 96,962 97,597 98,309 99,106 $100,000 894