On January 1, 2014, Crystal Corporation issued a $100,000 10-year bonds at 11%. Interest is paid annually on December 31. The bonds were sold for $94,349 and the yield is 12%.
Required
1. Prepare an amortization schedule that determines interest at the effective interest rate.
2. Prepare an amortization schedule by the straight-line method.
3. Prepare the journal entries to record interest expense on December 31, 2016, by each of the two methods.