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 $1,600,000 of five-year, 6% callable bonds dated July 1, Year 1, at a market (effective) rate of 7%, receiving cash of $1,533,468. 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.
31.	Paid the semiannual interest on the bonds. The bond discount amortization of $6,653 is combined with the semiannual interest payment.
Year 2
June 30.	Paid the semiannual interest on the bonds. The bond discount amortization of $6,653 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 $6,653 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 $39,920 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.

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-Note		fill in the blank 17	fill in the blank 18
		fill in the blank 20	fill in the blank 21
Dec. 31-Bond		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-Note		fill in the blank 53	fill in the blank 54
		fill in the blank 56	fill in the blank 57
Dec. 31-Bond		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.