The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: 20Y1 July Dec. 20Y2 June Dec. 20Y3 June 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. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 31 30 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 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.) 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, 2012.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

1a. Journalize the entries to record the 20Y1 transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6

1b. Journalize the entries to record the 20Y2 transactions. Refer to the Chart of Accounts for exact wording of account titles. Round all amounts to the nearest dollar.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6

1c. Journalize the entries to record the 20Y3 transactions. Refer to the Chart of Accounts for exact wording of account titles. Round all amounts to the nearest dollar.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4

Instructions Chart of Accounts
Instructions
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar
year:
20Y1
July
Dec.
20Y2
June
Dec.
20Y3
June
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.
Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual interest
payment.
31
30
31
Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual interest
payment.
Paid the semiannual interest on the bonds. The bond discount
amortization of $261,693 is combined with the semiannual interest
payment.
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.)
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, 2012.

ASSETS
110 Cash
126 Interest Receivable
111 Petty Cash
121 Accounts Receivable
122 Allowance for Doubtful Accounts
CHART OF ACCOUNTS
LIABILITIES
127 Notes Receivable
131 Merchandise Inventory
141 Office Supplies
142 Store Supplies
151 Prepaid Insurance
191 Land
192 Store Equipment
193 Accumulated Depreciation-Store
Equipment
210 Accounts Payable
221 Salaries Payable
231 Sales Tax Payable
232 Interest Payable
194 Office Equipment
195 Accumulated Depreciation-Office
Equipment
Winklevoss Inc.
241 Notes Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
General Ledger
315 Treasury Stock
321 Preferred Stock
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-
Common Stock
331 Paid-In Capital from Sale of
Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends
322 Paid-In Capital in Excess of Par-
Preferred Stock
REVENUE
410 Sales
610 Interest Revenue
611 Gain on Redemption of
Bonds
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
521 Sales Salaries Expense
522 Office Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Repairs Expense
534 Selling Expenses
535 Rent Expense
536 Insurance Expense
537 Office Supplies Expense
538 Store Supplies Expense
541 Bad Debt Expense
561 Depreciation Expense-Store
Equipment
562 Depreciation Expense-Office
Equipment
590 Miscellaneous Expense
710 Interest Expense
711 Loss on Redemption of
Bonds

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions