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The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $4,990,000 of five-year, 11% callable
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
Year 1 | |
July 1. | Issued $4,990,000 of five-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of $4,631,277. Interest is payable semiannually on December 31 and June 30. |
Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $35,873 is combined with the semiannual interest payment. |
Dec. 31. | Closed the interest expense account. |
Year 2 | |
June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $35,873 is combined with the semiannual interest payment. |
Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $35,873 is combined with the semiannual interest payment. |
Dec. 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 account is $215,233 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) |
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