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 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 % 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 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 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 installment note. The interest is payable on the date of the next instaliment 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