Entries for Bonds Payable, including bond redemption The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $3,250,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $2,999,044. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $25,096 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $150,574 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Required: 1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank or enter "0". When required, round your answers to the nearest dollar. Date Account Debit Credit Year 1 July 1 Dec. 31-Bond Dec. 31-Closing Year 2 June 30 Dec. 31-Bond Dec. 31-Closing Year 3 June 30 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.$ Check My Work

Entries for Bonds Payable, including bond redemption The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $3,250,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $2,999,044. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $25,096 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $150,574 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Required: 1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank or enter "0". When required, round your answers to the nearest dollar. Date Account Debit Credit Year 1 July 1 Dec. 31-Bond Dec. 31-Closing Year 2 June 30 Dec. 31-Bond Dec. 31-Closing Year 3 June 30 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.$ Check My Work

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Entries for Bonds Payable, including bond redemption

The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:

Year 1
July 1.	Issued $3,250,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $2,999,044. Interest is payable semiannually on December 31 and June 30.
Dec. 31.	Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $25,096 is combined with the semiannual interest payment.
Dec. 31.	Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 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 $150,574 after payment of interest and amortization of discount have been recorded. (Record the redemption only.)

Required:

1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank or enter "0". When required, round your answers to the nearest dollar.

Date	Account	Debit	Credit
Year 1
July 1



Dec. 31-Bond



Dec. 31-Closing


Year 2
June 30



Dec. 31-Bond



Dec. 31-Closing


Year 3
June 30

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.
$

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