The following transactions were completed by Winklevoss Inc. whose fiscal year is the calendar year. 1.) journalize the entry to record the foregoing 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 interest expense in (a) year 1 and (b) year 2. 3.) determine the carrying amount of the bonds as of December 31, year 2.

instructions Chart of Accounts Journal Final Questions Instructions Year 1 July 1 Oct. 1 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. Borrowed $320,000 by issuing a six-year, 5% installment note to Nicks Bank. The note requires annual payments of $63,046, with the first payment occurring on September 30, Year 2. Accrued $4,000 of interest on the installment note. The interest is payable on the date of the next installment note payment Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment. Dec. 31 31 Year 2 June 30 Sept. 30 Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment. Paid the annual payment on the note, which consisted of interest of $16,000 and principal of $47,046. Accrued $3,412 of interest on the installment note. The interest is payable on the date of the next installment note payment. Doc 31 instructions 31 Paid the semiannual interest on the bonds. The bond discount amortization of $207,940 is combined with the semiannual interest payment. 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. Paid the second annual payment on the note, which consisted of interest of $13,648 and principal of $49,398. Sept. 30 Required: 1. Journalize the entries to record the foregoing 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 (a) Year 1 and (b) Year 2 3. Determine the carrying amount of the bonds as of December 31, Year 2. Journal JOURNAL DATE DESCRIPTION POST. REF. DEET CREDIT ASSETS 1 2 3 4 5 6 8 9 10 Year 2 Instructions Journal x JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT ACO ASSETS 1 2 3 4 5 7 9 10 11 12 11UULLIS Journal Year 3 JOURNAL ACC ASSETS DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 3 TA Chart of Accounts ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 121 Accounts Receivable 610 Interest Revenue 611 Gain on Redemption of Bonds EXPENSES 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Office Salaries Exponse 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 191 Land 192 Store Equipment 193 Accumulated Depreciation Store Equipment 194 Office Equipment Journal Chart of Accounts 194 Office Equipment 195 Accumulated Depreciation Office Equipment 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 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 EQUITY 311 Common Stock EQUITY 311 Common Stock