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 Issued $71,900,000 of 20-year, 6% callable bonds dated July 1. Year 1, at a market (effective) rate of 7%, receiving cash of $64,222,869. Interest is payable semiannually on December 31 and June 30. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $191,933 is combined with the semiannual interest payment. 31 Closed the interest expense account. Year 2 June Dec 30 Paid the semiannual interest on the bonds. The bond discount amortization of S191,933 is combined with the semiannual interest payment, 31 Paid the semiannual interest on the bonds. The bond discount amortization of $191,933 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 $6,909,599 after payment of interest and amortization of discount have been recorded Dec 37 Paid the semiannual interest on the bonds the bond Giscount amortization of 1979 is combined with the semiannual Interest payment Closed the Interest expense account 31 Year 3 June 30 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $6,909,599 after payment of interest and amortization of discount have been recorded. (Record the redemption only) Required: 1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles 2. Indicate the amount of the interest expense in () Year 1 and (b) Year 2 3. Determine the carrying amount of the bonds as of December 31, Year 2 Journal ta. Journalize the entries to record the Year 1 transactions. Refer to the Chart of Accounts for exact wording of account titles JOURNAL ACCOUNTI ta Journalize the entries to record the Year 4 transactions Refer to the Chart of Accounts for eract wording of account ttles JOURNAL ACCOUNTIN DESCRIPTION POST CREDIT ASSETS LALE DATE Jul 1 DEBIT 64.222.669.00 1 Cash 1 767735100 3 71,900,000.00 2.348,933.00 5 Discount on Bonds Payable Bonds Payable Dec. 31 Interest Expense Discount on Bonds Payable Cash Dec 31 Income Summary Interest Expense 191,933.00 2.157,000.00 1 7 2348,933.00 2348933.00 1b. Journalize the entries to record the Year 2 transactions. Refer to the Chart of Accounts for exact wording of accounts 16. Journalize the entries to record the Year 2 transactions. Refer to the Chart of Accounts for exact wording of accounties JOURNAL ACCOUNTING DATE DESCAPTION POSTRE DERIT OSOIT ASSETS LAB 1 1c Journalize the entries to record the Year 3 transactions. Refer to the Chart of Accounts for exact wording of accounts DATE DESCRIPTION POSTRES DEBIT CREDIT ASSETS Final Questions 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
