Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image 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 $8,550,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 9%, receiving cash of $8,211,730. Interest is payable semiannually on December 31 and June 30. Oct. 1. Borrowed $430,000 by issuing a 10-year, 6% installment note to Nicks Bank. The note requires annual payments of $58,423, with the first payment occurring on September 30, Year 2. Dec. 31. Accrued $6,450 of interest on the installment note. The interest is payable on the date of the next installment note payment. Year 2 31. Paid the semiannual interest on the bonds. The bond discount amortization of $33,827 is combined with the semiannual interest payment. June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $33,827 is combined with the semiannual interest payment. Sept. 30. Paid the annual payment on the note, which consisted of interest of $25,800 and principal of $32,623. Dec. 31. Accrued $5,961 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 $33,827 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 $202,962 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 $23,843 and principal of $34,580. Required: Round all amounts to the nearest dollar. 1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank. Debit Credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: David Spiceland, Wayne Thomas, Don Herrmann

4th edition

1259307956, 978-1259307959

More Books

Students also viewed these Accounting questions

Question

Which threats and opportunities can already be identified today?

Answered: 1 week ago

Question

Who are the decision-makers in this project?

Answered: 1 week ago

Question

Which are still to be set?

Answered: 1 week ago