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

The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:   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
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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The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
 
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.
Instructions Chart of Accounts Journal The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: CHART OF ACCOUNTS 20Υ1 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. Winklevoss Inc. July 1 Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market (effective) rate of General Ledger 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. PAGE 10 Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined ASSETS REVENUE JOURNAL ACCOUNTING EQUATION with the semiannual interest payment. 110 Cash 410 Sales DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 111 Petty Cash 610 Interest Revenue 20Υ2 121 Accounts Receivable 611 Gain on Redemption of Bonds June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined 2 122 Allowance for Doubtful Accounts with the semiannual interest payment. 3 126 Interest Receivable EXPENSES Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined 4 with the semiannual interest payment. 127 Notes Receivable 510 Cost of Merchandise Sold 5 131 Merchandise Inventory 515 Credit Card Expense 20Υ3 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount 141 Office Supplies 516 Cash Short and Over 6 June 30 account is $9,420,961 after payment of interest and amortization of discount have been recorded. 142 Store Supplies 521 Sales Salaries Expense (Record the redemption only.) 151 Prepaid Insurance 522 Office Salaries Expense 191 Land 531 Advertising Expense 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. Required: 192 Store Equipment 532 Delivery Expense 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 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense PAGE 11 account titles. 194 Office Equipment 534 Selling Expenses JOURNAL ACCOUNTING EQUATION 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. 195 Accumulated Depreciation-Office Equipment 535 Rent Expense 3. Determine the carrying amount of the bonds as of December 31, 20Y2. 536 Insurance Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense Final Questions 221 Salaries Payable 541 Bad Debt Expense 3 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 4 232 Interest Payable 562 Depreciation Expense-Office Equipment 5 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. Enter amounts as positive number. 241 Notes Payable 590 Miscellaneous Expense 6 20Υ1. $ 251 Bonds Payable 710 Interest Expense 20Υ2- 2$ 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds 253 Premium on Bonds Payable 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. 3. Determine the carrying amount of the bonds as of December 31, 20Y2. EQUITY PAGE 12 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock JOURNAL ACCOUNTING EQUATION 315 Treasury Stock DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 321 Preferred Stock 1 322 Paid-In Capital in Excess of Par-Preferred Stock 2 331 Paid-In Capital from Sale of Treasury Stock 3 340 Retained Earnings 4 351 Cash Dividends 352 Stock Dividends
Transcribed Image Text:Instructions Chart of Accounts Journal The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: CHART OF ACCOUNTS 20Υ1 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. Winklevoss Inc. July 1 Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market (effective) rate of General Ledger 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. PAGE 10 Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined ASSETS REVENUE JOURNAL ACCOUNTING EQUATION with the semiannual interest payment. 110 Cash 410 Sales DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 111 Petty Cash 610 Interest Revenue 20Υ2 121 Accounts Receivable 611 Gain on Redemption of Bonds June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined 2 122 Allowance for Doubtful Accounts with the semiannual interest payment. 3 126 Interest Receivable EXPENSES Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined 4 with the semiannual interest payment. 127 Notes Receivable 510 Cost of Merchandise Sold 5 131 Merchandise Inventory 515 Credit Card Expense 20Υ3 Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount 141 Office Supplies 516 Cash Short and Over 6 June 30 account is $9,420,961 after payment of interest and amortization of discount have been recorded. 142 Store Supplies 521 Sales Salaries Expense (Record the redemption only.) 151 Prepaid Insurance 522 Office Salaries Expense 191 Land 531 Advertising Expense 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. Required: 192 Store Equipment 532 Delivery Expense 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 193 Accumulated Depreciation-Store Equipment 533 Repairs Expense PAGE 11 account titles. 194 Office Equipment 534 Selling Expenses JOURNAL ACCOUNTING EQUATION 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. 195 Accumulated Depreciation-Office Equipment 535 Rent Expense 3. Determine the carrying amount of the bonds as of December 31, 20Y2. 536 Insurance Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense Final Questions 221 Salaries Payable 541 Bad Debt Expense 3 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 4 232 Interest Payable 562 Depreciation Expense-Office Equipment 5 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. Enter amounts as positive number. 241 Notes Payable 590 Miscellaneous Expense 6 20Υ1. $ 251 Bonds Payable 710 Interest Expense 20Υ2- 2$ 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds 253 Premium on Bonds Payable 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. 3. Determine the carrying amount of the bonds as of December 31, 20Y2. EQUITY PAGE 12 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock JOURNAL ACCOUNTING EQUATION 315 Treasury Stock DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 321 Preferred Stock 1 322 Paid-In Capital in Excess of Par-Preferred Stock 2 331 Paid-In Capital from Sale of Treasury Stock 3 340 Retained Earnings 4 351 Cash Dividends 352 Stock Dividends
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