eBook Show Me How Calculator Pri tem Entries for Bonds Payable and installment Note Transactions The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: Year 1 Issued $7.970,000 of five year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 9%, receiving cash of $7,654,677 July 1. Interest is payable semiannually on December 31 and June 30. Borrowed $310.000 by issuing a 10-year, 7% installment note to Intexicon Bank. The note requires annual payments of $44,137, with Oct. 1. the first payment occurring on September 30, Year 2. Dec. 31. Accrued $5,425 of interest on the installment note. The interest is payable on the date of the next installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $31,533 is combined with the semiannual interest Dec. 31. payment Year 2 Paid the semiannual Interest on the bonds. The bond discount amortization of $31.533 is combined with the semiannual interest June 30. payment Sept. 30. Paid the annual payment on the note, which consisted of interest of $21,700 and principal of $22.437. Dec. 31. Accrued $5,032 of interest on the installment note. The interest is payable on the date of the next installment note payment. Dec Paid the semiannual Interest on the bonds. The bond discount amortization of $31.533 is combined with the semiannual interest payment Year 3 Barter the remain of the honde which were la The Lance in the hand i nternet 10 103 warmant eBook Show Me How Calculator P Home Paid the semiannual interest on the bonds. The bond discount amortization of $31,533 is combined with the semiannual interest June 30. payment Sept. 30. Pald the annual payment on the note, which consisted of interest of $21,700 and principal of $22.437. Dec. 31. Accrued $5,032 of interest on the installment note. The interest is payable on the date of the next installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $31,533 is combined with the semiannual interest Dec. 31. payment Year 3 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $189,193 after payment of June 30. 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 $20,129 and principal of $24,008 Required: 1. Journalize the entries to record the foregoing transactions. For compound transactions, if an amount box does not require an entry, leave it blank or enter "O". When required, round your answers to the nearest dollar Date Account Debit Credit Year! Check My Work 1 more Check My Work uses remaining 1. Journalize the entries to record the foregoing transactions. For compound transactions, if an amount box does not require an entry, leave it blank or enter "0". When required, round your answers to the nearest dollar Date Account Debit Credit July Oct. 1 Dec. 31. Note Dec. 31-Bond Dec. 31-Bond Year 2 Pune 30 Sept. 30 Dec. 31-Note Dec. 31-Note Dec. 31-Bond Year 3 June 30 Sept. 30 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2 Check My Work more Check My Work uses remaining Year 3 June 30 Sept. 30 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. a. Year! b. Year 25 3. Determine the carrying amount of the bonds as of December 31, Year 2
