Entries for bonds payable, including bond redemption

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

20Y1

Date	Transaction
July 1.	Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30.
December 31.	Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment.

20Y2

Date	Transaction
June 30.	Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment.
December 31.	Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment.

20Y3

Date	Transaction
June 30.	Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. (Record the redemption only.)

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

Date	Account	Debit	Credit
20Y1 July 1	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash
	Accounts PayableDiscount on Bonds PayableInterest ExpenseInterest RevenuePremium on Bonds PayablePremium on Bonds Payable	Premium on Bonds Payable	Premium on Bonds Payable
	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableBonds Payable	Bonds Payable	Bonds Payable
Dec. 31	Bonds PayableCashGain on Redemption of BondsInterest ExpenseInterest PayableInterest Expense	Interest Expense	Interest Expense
	Bonds PayableCashGain on Redemption of BondsInterest PayablePremium on Bonds PayablePremium on Bonds Payable	Premium on Bonds Payable	Premium on Bonds Payable
	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash
20Y2 June 30	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Bonds PayableCashDiscount on Bonds PayableInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable	- Select -	- Select -
Dec. 31	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Bonds PayableCashDiscount on Bonds PayableInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable	- Select -	- Select -
20Y3 June 30	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableDiscount on Bonds PayableGain on Redemption of BondsInterest ExpenseLoss on Redemption of Bonds	- Select -	- Select -
	CashInterest ExpenseInterest PayableLoss on Redemption of BondsPremium on Bonds Payable	- Select -	- Select -

Question Content Area

2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2.

Year	Interest Expense
a. 20Y1	fill in the blank 1 of 2$
b. 20Y2	fill in the blank 2 of 2$

3. Determine the carrying amount of the bonds as of December 31, 20Y2. fill in the blank 1 of 1$