Instructions Chart of Accounts Joumal Final Questions Instructions The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year Year 1 July 1 Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of S63,532 267. Interest is payable semiannually on December 31 and June 30 Paid the semiannual interest on the bonds. The bond discount amortization of S261,693 is combined Dec. 31 with the semiannual interest payment. 31 Closed the interest expense account Year 2 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of S261,693 is combined with the semiannual interest payment Dec 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 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 $9.420.961 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. Be sure to include the year in the date for the entries. Refer to the Chart of Accounts for exact wording of account titles 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. 3. Determine the carrying amount of the bonds as of December 31, Year 2 Chart of Accounts 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 531 Advertising Expense 192 Store Equipment 532 Delivery Expense 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense 194 Office Equipment 534 Selling Expenses 195 Accumulated Depreciation Office Equipment 535 Rent Expense 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense 221 Salaries Payable 541 Bad Debt Expense LE Instructions Chart of Accounts Journal Final Questions Chart of Accounts 193 Accumulated Depreciation Store Equipment 533 Repairs Expense 194 Office Equipment 534 Selling Expenses 195 Accumulated Depreciation Office Equipment 535 Rent Expense 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense 221 Salaries Payable 541 Bad Debt Expense 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 232 Interest Payable 562 Depreciation Expense-Office Equipment 241 Notes Payable 590 Miscellaneous Expense 251 Bonds Payable 710 Interest Expense 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds 253 Premium on Bonds Payable EQUITY 311 Common Stock 312 Paid-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 Check My Work Instructions Chart of Accounts Joumal Final Questions X Journal 18. Joumalize the entries to record the Year 1 transactions Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE ASSETS EQUITY POST. REF. DESCRIPTION DEBIT CREDIT LIABILITIES 1 3 5 1 Entries for bonds payable, including bond redemption Instructions Chart of Accounts Journal Final Questions Journal 15. Joumalize the entries to record the Year 2 transactions Refer to the Chart of Accounts for exact wording of account titles PAGE 11 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST: REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 5 5 6 10. Journalize the entries to record the Year 3 transactions. Refer to the Chart of Accounts for exact wording of account titles. PAGE 12 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 10 jours ze the entries to record the Year 3 transactions Refer to the Chart of Accounts for exact wording of account titles PAGE 12 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS EQUITY LIABILITIES 2 3 Check My Work Final Questions X 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. Year 1: $ Year 2 1$ 3. Determine the carrying amount of the bonds as of December 31, Year 2. 1$ HR