Entries for Bonds Payable and Instaliment Note Transactions The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $55,000,000 of 10 -year, 9% callable bonds dated July 1 , Year 1 , at a market (effective) rate of 7%, receiving cash of \$62,817,040. Interest is payable semiannually on December 31 and June 30. Oct. 1. Borrowed $450,000 by issuing a six-year, 8% instaliment note to Intexicon Bank. The note requires annual payments of $97,342, with the first parment occurring on September 30, Year 2. Dec. 31. Accrued 59,000 of interest on the instaliment 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 s390,852 is combined with the semiannual interest parment. Year 2 June 30. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest parment. 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 instaliment 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 parment. Dec. 31 Interest Expense 7,773 Dec. 31 Interest Expense x Year 3 June 30 Sept. 30 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. Required: 1. Journalize the entries to record the foregoing transactions in chronologicalorder. For a compound transaction, if an amount box does not require an entry, leave at blank. When required, round amounts to the nearest doliar. Dec. 31 Interest Expense Dec. 31 Interest Expense v x Bonds Payable x Year 2 June 30 Interest Expense Sept. 30 Accounts Payable x Income Summary x x 97,342 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. a. Year 1 b. Year 2 3. Determine the carrying amount of the bonds as of December 31, Year 2