Entries for bonds payable, including bond redemption Instructions Chart of Accounts Journal Final Questions Instructions The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1 Dec 31 Issued $58,800,000 of 20-year, 11% callable bonds dated July 1. Year 1, at a market (effective) rate of 13%, receiving cash of $50,482,396. Interest is payable semiannually on December 31 and June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment 31 Closed the interest expense account. Year 2 June 30 Dec 31 Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment. Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment 31 Closed the interest expense account Year 3 June 30 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $7,485,844 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Chart of Accounts Winklevoss Inc. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 121 Accounts Receivable 611 Gain on Redemption of Bonds 122 Allowance for Doubtful Accounts 126 Interest Receivable EXPENSES 127 Notes Receivable 510 Cost of Merchandise Sold 131 Merchandise Inventory 515 Credit Card Expense 141 Office Supplies 516 Cash Short and Over 142 Store Supplies 521 Sales Salaries Expense 151 Prepaid Insurance 522 Office Salaries Expense 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 194 Office Equipment 534 Selling Expenses Chart of Accounts LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 536 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 711 Loss on Redemption of Bonds 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock 312 Pald-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390. Income Summary Journal 1a Journalize the entries to record the Year 1 transactions. Refer to the Chart of Accounts for exact wording of account titles PAGE 10 ACCOUNTING EQUATION JOURNAL DATE DESCRIPTION POST REF DERIT CREDIT ASSETS LIABILITIES EQUITY 1 2 1 1b. Journalize the entries to record the Year 2 transactions. Refer to the Chart of Accounts for exact wording of account titles. Joumal 1b. Journalce the entries to record the Year 2 transactions. Refer to the Chart of Accounts for exact wording of accountries IMGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REX DERIT CREDIT ASSETS LIABILITIES EQUITY 1 2 5 5 10. Journalize the entries to record the Year 3 transactions. Refer to the Chart of Accounts for exact wording of accountitles PAGE 10 1c. Journalize the entries to record the Year 3 transactions. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POSTE DER CREDIT ASSETS LUBUTIES EQUITY 1 3 1 Entries for bonds payable, including bond redemption Instructions Chart of Accounts Journal Final Questions Final Questions x 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. Year 1: Year 2: $ 3. Determine the carrying amount of the bonds as of December 31, Year 2