. InstructionsSept.30Paid the annual payment on the note, which consisted of interest of $30,800 and principal of $61,510.Dec.31Accrued $6,624 of interest on the installment note. The interest is payable on the date of the nextinstallment note payment.31Paid the semiannual interest on the bonds. The bond discount amortization of $322,153 is combinedwith the semiannual interest payment.Year 3June30Recorded the redemption of the bonds, which were called at 98. The balance in the bond discountaccount is $11,597,527 after payment of interest and amortization of discount have been recorded.Record the redemption only.Sept.30Paid the second annual payment on the note, which consisted of interest of $26,494 and principal ofS65,816.Required:1. Joumalize the entries to record the foregoing transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOWjournals do not use lines for journal explanations. Every line on a jourmal page is used for debit or credit entries. CNOW journais willautomatically indent a credit entry when a credit amount is entered. Round all amounts to the nearest dollar.2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2.3. Detemine the carrying amount of the bonds as of December 31, Year 2. InstructionsFinal QuestionsYear 1JulyIssued $75,100,.000 of 20-year, 8% callable bonds dated July 1. Year 1, at a market (effective) rate of2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2.10%, receiving cash of $82,213,881. Interest is payable semiannually on December 31 and June 30.Oc.1Borrowed $440,000 by issuing a six-year, 7% installment note to Nicks Bank. The note requires annuala. Year 1:ISpayments of $82,310, with the first payment occurring on September 30, Year 2.b. Year 2-Dec.31Accrued $7,700 of interest on the installment note. The interest is payable on the date of the nextinstallment note payment.3. Detemine the carying amount of the bonds as of December 31, Year 2.31Paid the semiannual interest on the bonds. The bond discount amortization of $322,153 is combinedwith the semiannual interest payment.Year 2June30Paid the semiannual interest on the bonds. The bond discount amortization of $322,153 is combinedwith the semiannual interest payment.Sept.30Paid the annual payment on the note, which consisted of interest of $30,800 and principal of $61,510.Dec.31Accrued $8,624 of interest on the installment note. The interest is payable on the date of the nextinstallment note payment.31Paid the semiannual interest on the bonds. The bond discount amortization of $322,153 is combinedwith the semiannual interest payment.Year 3June30Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount

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Sept. 30 Paid the annual payment on the note. which consisted of interest of $30,800 and principal of $61,510. Dec. 31 Accrued $8.624 of interest on the installment 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 $322,153 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 $11,597,527 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 $26,494 and principal of S85.816. Required: 1. Joumalize the entries to record the foregoing transactions. Refer to the chart of accounta for the exact wording of the account titles. CNOW joumals do not use lines for journal explanations Every line on a journal page is used for debit or credit entries. CNOW jourmals will automatically indent a credit entry when a credit amount is entered. Round all amounts to the nearest dollar. 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. 3. Detemine the carrying amount of the bonds as of December 31, Year 2.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q