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The following amortization schedule relates to a bond issuance on January 1.

Stated

Interest

Market

Interest

Amortization

Amount

Date

Jan.

1, Year 1

Dec. 31, Year 1

Dec. 31, Year 2

Dec. 31, Year 3

Dec. 31, Year 4

Dec. 31, Year 5

Dec. 31, Year 6

Dec. 31, Year 7

Dec. 31, Year 8

Dec. 31, Year 9

Dec. 31, Year 10.

$600

600

600

600

600

600

600

600

600

600

$651

654

658

662

667

671

676

682

687

694

$51

54

58

62

67

71

76

82

87

94

Bond Carrying

Value

$ 9,298

9,349

9,403

9,461

9,523

9,590

9,661

9,737

9,819

9,906

10,000

Required

What is the face amount of the bonds? What is the selling price of the bonds?

Were the bonds sold at a discount or premium? If so, what is the dollar amount?

Are bond discounts or premiums amortized using the effective interest method or the straight-line interest method?

What is the stated rate?

What is the market rate?

What is the journal entry required on December 31 of Year 8 based on this amortization schedule?

Why do market interest amounts increase each year?

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The following amortization schedule relates to a bond issuance on January 1. Required a. What is the face amount of the bonds? What is the selling price of the bonds? b. Were the bonds sold at a discount or premium? If so, what is the dollar amount? c. Are bond discounts or premiums amortized using the effective interest method or the straight-line interest method? d. What is the stated rate? e. What is the market rate? f. What is the journal entry required on December 31 of Year 8 based on this amortization schedule? g. Why do market interest amounts increase each year

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