ear 1 Year 1, at a market (effective) rate of 7%, receiving cash of July 1. Issued $55,000,000 of 10-year, 99% callable bonds dated July 1, $62,817,040. Interest is payable semiannually on December 31 and June 30 Oct. 1. Borrowed $450,000 by issuing a six-year, 8% installment note to Intexicon Bank. The note requires annual payments of $97,342, with the first payment occurring on September 30, Year 2. Dec. 31. Accrued $9,000 of interest gn the installment note. The interest is payable on the date of the next installment note payment. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Year 2 June 30. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment Sept. 30. Paid the annual payment on the note, which consisted of interest of $36,000 and principal of $61,342. Dec. 31. Accrued $7,773 of interest on the instalment note. The Interest is payable on the date of the next installment note payment. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Year 3 June 30. Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. Record the redemption only. Sept. 30. Paid the second annual payment on the note, which consisted of interest of $31,093 and principal of $66,249