PR 11-3A Entries for Bonds Payable, Including Bond Redemption Obj. 2 The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: 20Y1 July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 20Y2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 2013 June 30. Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Instructions 1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 2012. 3. Determine the carrying amount of the bonds as of December 31, 2012. Answer + Check Figure: $64,317,346
PR 11-3A Entries for Bonds Payable, Including Bond Redemption Obj. 2 The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: 20Y1 July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 20Y2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 2013 June 30. Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Instructions 1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 2012. 3. Determine the carrying amount of the bonds as of December 31, 2012. Answer + Check Figure: $64,317,346
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PR 11-3A Entries for Bonds Payable, Including Bond Redemption
Obj. 2 The following transactions were completed by Winklevoss Inc., whose fiscal year is
the calendar year:
20Y1
July
1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1,
20Y1, at a market (effective) rate of 13%, receiving cash of
Dec. 31. Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual
interest payment.
20Y2
June 30.
$63,532,267. Interest is payable semiannually on December 31
and June 30.
2013
June 30.
Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual
interest payment.
Dec. 31. Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual
interest payment.
Recorded the redemption of the bonds, which were called at
98. The balance in the bond discount account is $9,420,961
after payment of interest and amortization of discount have
been recorded. (Record the redemption only.)
Instructions
1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar.
2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2.
3. Determine the carrying amount of the bonds as of December 31, 2012.
Answer +
Check Figure: $64,317,346
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Step 1: Define Journal entries
VIEWStep 2: 1. Journalizing the entries to record the transactions
VIEWStep 3: Formula sheet:-
VIEWStep 4: 2. Indicate the amount of the interest expense in year 1 and year 2
VIEWStep 5: 3. Determine the carrying amount of the bonds as of december 31,Year 2
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