Entries for Bonds Payable and Installment Note Transactions

The following transactions were completed by Almeda Inc., whose fiscal year is the calendar year:

Year $1$

July $1.$ Issued $$75,000,000$ of $10-$year, $9\%$ callable bonds dated July $1,$ Year $1,$ at a market $($effective$)$ rate of $7\%,$ receiving cash of $$85,659,600.$ Interest is payable semiannually on December $31$ and June $30.$

Oct. $1.$ Borrowed $$270,000$ by issuing a six$-$year, $8\%$ installment note to Main Street Bank. The note requires annual payments of $$58,405,$ with the first payment occurring on September $30,$ Year $2.$

Dec. $31.$ Accrued $$5,400$ of interest on 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 $$532,980$ is combined with the semiannual interest payment.

Year $2$

June $30.$ Paid the semiannual interest on the bonds. The bond premium amortization of $$532,980$ is combined with the semiannual interest payment.

Sept. $30.$ Paid the annual payment on the note, which consisted of interest of $$21,600$ and principal of $$36,805.$

Dec. $31.$ Accrued $$4,664$ of interest on 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 $$532,980$ 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 $$8,527,680$ 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 $$18,656$ and principal of $$39,749.$

Required:

$1.$ Journalize the entries to record the foregoing transactions in chronological order. If an amount box does not require an entry, leave it blank. When required, round amounts to the nearest dollar.

Date Account Debit Credit

Year $1$

July $1$

fill in the blank $2$

fill in the blank $3$

fill in the blank $5$

fill in the blank $6$

fill in the blank $8$

fill in the blank $9$

Oct. $1$

fill in the blank $11$

fill in the blank $12$

fill in the blank $14$

fill in the blank $15$

Dec. $31$

fill in the blank $17$

fill in the blank $18$

fill in the blank $20$

fill in the blank $21$

Dec. $31$

fill in the blank $23$

fill in the blank $24$

fill in the blank $26$

fill in the blank $27$

fill in the blank $29$

fill in the blank $30$

Year $2$

June $30$

fill in the blank $32$

fill in the blank $33$

fill in the blank $35$

fill in the blank $36$

fill in the blank $38$

fill in the blank $39$

Sept. $30$

fill in the blank $41$

fill in the blank $42$

fill in the blank $44$

fill in the blank $45$

fill in the blank $47$

fill in the blank $48$

fill in the blank $50$

fill in the blank $51$

Dec. $31$

fill in the blank $53$

fill in the blank $54$

fill in the blank $56$

fill in the blank $57$

Dec. $31$

fill in the blank $59$

fill in the blank $60$

fill in the blank $62$

fill in the blank $63$

fill in the blank $65$

fill in the blank $66$

Year $3$

June $30$

fill in the blank $68$

fill in the blank $69$

fill in the blank $71$

fill in the blank $72$

fill in the blank $74$

fill in the blank $75$

fill in the blank $77$

fill in the blank $78$

Sept. $30$

fill in the blank $80$

fill in the blank $81$

fill in the blank $83$

fill in the blank $84$

fill in the blank $86$

fill in the blank $87$

fill in the blank $89$

fill in the blank $90$

$2.$ Indicate the amount of the interest expense in $($a$)$ Year $1$ and $($b$)$ Year $2.$

a$.$ Year $1$ $fill in the blank $91$

b$.$ Year $2$ $fill in the blank $92$

$3.$ Determine the carrying amount of the bonds as of December $31,$ Year $2.$

$fill in the blank $93$