structions he following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year Year 1 July Issued $71,100,000 of 20-year, 12% callable bonds dated July 1, Year 1, at a market (effective) rate of 1496, receiving cash of $61,621,133. Interest is payable semiannually on December 31 and June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment 1 Dec. 31 31, Closed the interest expense account. Year 2 Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined June 30 Dec. 31 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 Instructions Year 2 June Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. Closed the interest expense account 30 Dec. 31 31 Year 3 June 30 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $8,530,979 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 tities 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 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Office Salaries Expense 531 Adcertising Exnense Chart of Accounts ST_Piepau nsul ance. 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 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 LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable Chart of Accounts 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable 710 Interest Expense 711 Loss on Redemption of Bonds 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 Journal 1a. Journalize the entries to record the Year 1 transactions. Refer to the Chart of Accounts for exact wording of account titles JOURNAL DATE DESCRIPTION POST. REF DEBIT CREDIT Journal 1b. Journalize the entries to record the Year 2 transactions. Refer to the Chart of Accounts for exact wording of account titles JOURNA DATE DESCRIPTION POST. REF DEBIT CREDIT 1c. Journalize the entries to record the Year 3 transactions. Refer to the Chart of Accounts for exact wording of account titles JOURNAL DATE DESCRIPTION POST, REF DEBIT CREDIT 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