The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year Year 1 July 1 1 issued $32,300,000 of 20-year, 9% Callable bonds dated July 1 Year 1. at a market (effective) rate of 11%, receiving cash of $27.116.993. Interest is payable semiannually on December 31 and June 30, Borrowed 5630,000 by issuing a six-year, 4% installment note to Nicks Bank. The note requires annual payments of $82,028, with the first payment occurring on September 30, Year 2 Accrued 54,300 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 $129.575 is combined with the semiannual interest payment 31 31 Year 2 June 30 Sept Dec 30 31 Paid the semiannual interest on the bonds. The bond discount amortization of $129.575 is combined with the semiannual interest payment Paid the annual payment on the note, which consisted of interest of $17.200 and principal of $64.828 Accrued $3.652 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 $129.575 is combined 31 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 54,664,707 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 514,607 and principal of $67.421. 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 is 2. Indicate the amount of the interest expense in ( Year and your 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 610 Interest Revenue 611 Gain on Redemption of Bonds 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 142 Store Supplies 151 Prepaid Insurance 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation Office Equipment 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Seling Expenses 535 Rent Expense 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 221 Salaries Payable 538 Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 590 Miscellaneous Expense 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 1. Journalte the entries to record the foregoing transactions Round almo s olar Refer to the Chart of Accounts for exact wording of account PAGE 10 ACCOUNTING EQUATION POST DEBIT CREDIT ASSETS LIABILITES COUNTY JOURNAL ACCOUNTING EQUATION POST RER CREDIT ASSETS LIAUTE EQUITY PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION POST. REF. DEBIT CREDIT A SSETS MILITIES QUITY 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 as of December 31 Year 2