The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: 20Υ1 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 July and 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 20Υ2 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 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 20Υ3 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.) June 30 Required: 1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Refer to the Chart of ACcounts for exact wording of account titles. 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, 20Y2.

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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1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.

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, 20Y2.

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The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
20Υ1
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 3O.
July
1
Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is
combined with the semiannual interest payment.
Dec.
31
20Υ2
Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is
combined with the semiannual interest payment.
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
20Y3
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.)
June
Required:
1.
Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Refer to
the Chart of Accounts for exact wording of account titles.
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, 20Y2.

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