The following transactions were completed by Winklevoss Inc, whose fiscal year is the calendar year Year 1 July 1 Oct 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 563,532,267 Interest is payable semiannually on December 31 and June 30. Borrowed $200,000 by issuing a six-year, 6% installment note to Nicks Bank. The note requires annual payments of $40,673, with the first payment occurring on September 30, Year 2 Accrued $3,000 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 $261,693 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 S261,693 is combined with the semiannual interest payment Paid the annual payment on the note, which consisted of interest of S12.000 and principal of 528,673 Accrued $2,570 of interest on the installment noteThe interest is payable on the date of the next Installment note payment Dec 31 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261 693 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 $9.420.961 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 $10.280 and principal of $30,393 Sept 30 Required: 1. Journalize the entries to record the foregoing transactions Refer to the chart of accounts for the exact wording of the account titles CNOW Journals do not use ines for journal explanations. Every line on a joumal page is used for debitor credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered Round all amounts to the nearest dollar 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 Winklevoss Inc. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenge 121 Accounts Receivable 611 Gain on Redemption of Bonds 122 Allowance for Doubtful Accounts 126 Interest Receivable EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 516 Cash Short and Over 521 Sales Salaries Expense 191 Land 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 192 Store Equipment 193 Accumulated Depreciation Store Equipment 533 Repairs Expense 194 Office Equipment 534 Selling Expenses 535 Rent Expense 195 Accumulated Depreciation Office Equipment 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense 221 Salanes Payable 541 Bad Debt Expense 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 232 Interest Payable 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 241 Notes Payable 710 Interest Expense 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable 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 Pald-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends Journal Journalize the entries to record the foregoing transactions Refer to the chart of accounts for the exact wording of the account titles CNOW journals do not use lines to Journal explanations. Every line on a journal page is used for dobit or credt entries CNOW Journals will automatically indent a credit entry when a credit amount is entere Round all amounts to the nearest dollar. Year 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIES 1 2 3 5 5 6 9 10 Year 2 PAGE 10 JOURNAL ACCOUNTING EQUATION DUTE DESCRIPTION POST. REF DERIT CREDIT LOUI 1 - 10 11 Year 3 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS EQUITY 1 I 4 Final Questions 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2 a. Year 1: $ b. Year 2: $ 3. Determine the carrying amount of the bonds es of December 31, Year 2