The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:Year $1$July$1$Issued $$71,100,000$ of $20-$year, $12\%$ callable bonds dated July $1,$ Year $1,$ at a market $($effective$)$ rate of $14\%,$ receiving cash of $$61,621,133.$ Interest is payable semiannually on December $31$ and June $30.$Oct$\mathrm{.}1$Borrowed $$250,000$ by issuing a six$-$year, $5\%$ installment note to Nicks Bank. The note requires annual payments of $$49,254,$ with the first payment occurring on September $30,$ Year $2.$Dec$\mathrm{.}31$Accrued $$3,125$ of interest on the installment note. The interest is payable on the date of the next installment note payment$\mathrm{.}31$Paid the semiannual interest on the bonds. The bond discount amortization of $$236,972$ is combined with the semiannual interest payment.Year $2$June$30$Paid the semiannual interest on the bonds. The bond discount amortization of $$236,972$ is combined with the semiannual interest payment.Sept$\mathrm{.}30$Paid the annual payment on the note, which consisted of interest of $$12,500$ and principal of $$36,754.$Dec$\mathrm{.}31$Accrued $$2,666$ of interest on the installment note. The interest is payable on the date of the next installment note payment$\mathrm{.}31$Paid the semiannual interest on the bonds. The bond discount amortization of $$236,972$ is combined with the semiannual interest payment.Year $3$June$30$Recorded the redemption of the bonds, which were called at $98.$ The balance in the bond discount account is $$8,530,979$ after payment of interest and amortization of discount have been recorded. Record the redemption only.Sept$\mathrm{.}30$Paid the second annual payment on the note, which consisted of interest of $$10,662$ and principal of $$38,592.$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 lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round all amounts to the nearest dollar$\mathrm{.}2.$Indicate the amount of the interest expense in $($a$)$ Year $1$ and $($b$)$ Year $2\mathrm{.}3.$Determine the carrying amount of the bonds as of December $31,$ Year $2.$

Entries for bonds payable and installment note transactions

$\backslash$table$[[$Instivietions$,$Chart of Accounts Journal Final Questions$]]$

Journal credit entry when a credit amount is entered. Round all amounts to the nearest dollar.

Year $1$