Display the general ledger reports for the Interest Expense account and indicate the amount of interest expense

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Question:

Display the general ledger reports for the Interest Expense account and indicate the amount of interest expense in (a) 2018 and (b) 2019."

Entries for Bonds Payable, including bond redemption

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

Year 1

July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, Year 1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30.

Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment.

31. Closed the interest expense account.

Year 2

June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment.

Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment.

31. Closed the interest expense account.

Year 3

June 30. Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. (Record the redemption only.)

1. Journalize the entries to record the foregoing transactions.

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 2.