The following transactions were completed by Winklevoss the, whose fiscal year is the calendar year: Year 1 July 1. Issued $4,040,000 of five-year, 6% caliable bonds dated July 1, Year 1, at a market (effective) rate of 8%, receiving cash of $3,712,319, Interest is payable semiannually on December 31 and June 30 . Oct. 1. Borrowed $120,000 by issuing a 10-year, 7% installment note to Nicks Bank. The note requires annual payments of $17,085, with the first payment pecurring on September 30 , Year 2. Dec., 31. Accrued $2,100 of interest on the instaliment note. The interest is payable on the date of the next installment note payment. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $32,768 is combined with the semiannual interest payment. Year 2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $32,768 is combined with the semiannual interest poyment. Sept. 30. Paid the annual payment on the note, which consisted of interest of $8,400 and principal of 58,685. Dec. 31. Accrued \$1,948 of interest on the instaliment note. The interest is payable on the date of the next installment note payment. 11. Paid the semiannual interest on the bonds. The bond discount amortization of 532,768 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 $196,609 after payment of interestand amertization of discount have been recorded, Record the redemption only. June 30. Recorded the redemption of the bonds, which were called at 98 . The balance in the bond discount account is $196,609 after payment of Interest and amortization of discount have been recorded. Record the redemption only. Sept, 30. Paid the second annual payment on the note, which consisted of interest of $7,792 and principal of $9,293. Required: Round all amounts to the nearest dollar. 1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank. 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. a. Year 1$ b. Year 2$ 3. Determine the carrying amount of the bonds as of December 31, Year 2