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ASAP Entries for Bonds Payable and Installment Note Transactions The following transactions were completed by Winklevoss Inc, whose fiscal year is the calendar year: Year

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image text in transcribedimage text in transcribed Entries for Bonds Payable and Installment Note Transactions The following transactions were completed by Winklevoss Inc, whose fiscal year is the calendar year: Year 1 July 1. Issued $5,420,000 of five-year, 8% callable bonds dated July 1, Year 1 , at a market (effective) rate of 10%, receiving cash of $5,001,481. Interest is payable semiannually on December 31 and June 30 . Oct. 1. Borrowed $120,000 by issuing a 10-year, 7% installment note to Nicks Bank. The note requires annual payments of $17,085, with the first payment occurring on September 30 , Year 2. Dec. 31. Accrued $2,100 of interest on the installment note. The interest is payable on the date of the next installment note payment. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $41,852 is combined with the semiannual interest payment. Year 2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $41,852 is combined with the semiannual interest payment. Sept. 30. Paid the annual payment on the note, which consisted of interest of $8,400 and principal of $8,685. Dec. 31. Accrued $1,948 of interest on the installment note. The interest is payable on the date of the next installment note payment. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $41,852 is combined with the semiannual interest payment. Year 3 June 30. Recorded the redemption of the bonds, which were called at 98 . The balance in the bond discount account is $251,111 after payment of interest and amortization of discount have been recorded. Record the redemption only. Sept. 30. Paid the second annual payment on the note, which consisted of interest of $7,792 and principal of $9,293. Required: b. Year 24 3. Determine the carrying amount of the bonds as of December 31 , Year 2

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