02 Jul Financial Accounting
Question Description
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: ($64,317,346)
Year 1
July 1. Issued $74,000,000 of 20-year. 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest payable semiannually on December 31 and June 30.
Dec. 31. Paid the semiannually interest on the bonds. The bond discount amortization of %261,693 is combined with the semiannually interest payment.
31. Closed the interest expense account.
Year 2
June 30. Paid the semiannually interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannually interest payment.
Dec. 31. Paid the semiannual interest on 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) Year 1 and (B) Year 2,
3. Determine the carrying amount of the bonds as of December 31, Year
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