Instructions The following transactions were completed by Winklevoss hc., whose fiscal year is the calendar year: July 1 Issued $32,300,000 of 20-year, 9% callable bonds dated July 1, Year 1 at a market (effective) rate of 11%, receiving cash of $27,116,993. Interest is payable semiannually on December 31 and June 30. Dec 31 Borrowed $430,000 by Issuing a six-year, 4% Installment note to Nicks Bank. The note requires annual payments of $82,028, with the first payment occurring on September 30, Year 2. Accrued $4,300 of Interest on the installment note. The Interest is payable on the date of the next Installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual Interest payment. 31 Year 2 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual interest payment Paid the annual payment on the note, which consisted of interest of $17,200 and principal of $64,828. Sept. 30 Dec. 31 Accrued $3,652 of interest on the installment note. The interest is payable on the date of the next Installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual Interest payment 31 Year 3 June 30 Recorded the redemption of the bonds, which were called at 98. The balance in the band discount account is $4,664,707 after payment of interest and amortization of discount have been recorded. Record the redemption only. Pald the second annual payment on the note, which consisted of interest of $14,607 and principal of $67,421 Sept. 30 Required: 1 Joumalize the entries to record the foregoing 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) Year 1 and (b) Year 2 3. Determine the carrying amount of the bonds as of December 31, Year 2. CHART OF ACCOUNTS Winklevoss Inc. General Ledger REVENUE ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation Office Equipment 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 637 Office Supplies Expense 538 Store Supplies Expense 541 Bad Debt Expense LIABILITIES 210 Accounts Payable 221 Salaries Payable LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable 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 EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary Journal 1. Joumalize the entries to record the forgoing transactions. Round all amounts to the newest dolor. Refer to the Chart of Accounts of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION P OST. REY DERIT CREDIT ASSETS LIABILITIES EQUITY Journal 1. Joumalize the entries to record the forgoing transactions. Round all amounts to the newest dolor. Refer to the Chart of Accounts of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION P OST. REY DERIT CREDIT ASSETS LIABILITIES EQUITY HAR JOURNAL PAGE 10 ACCOUNTING EQUATION DATE DESCRIPTION POST. REFA DEBIT C REDIT A SSETS ABILITIES ET Year 3 PAGE 10 ACCOUNTING EQUATION DATE TIE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 5 Final Questions 2. Indicate the amount of the Interest expense in (a) Year 1 and (b) Year 2 a. Year 1: b. Year 2: 3. Determine the carrying amount of the bonds as of December 31, Year 2. Journalize the entries to record the foregoing transactions Round all amounts to the nearest dollar Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REE D ELIT CREDIT ASSETS LIABILITIES EQUITY Year 2 PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION POST. REF. DEBIT CREDIT A SSETS LIABILITIES EQUITY Yoar 3 PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION CREDIT ASSETS LIABILITIES EQUITY LLLL Final Questions 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. a. Year 1: b. Year 2: 3. Determine the carrying amount of the bonds as of December 31, Year 2 Check My Work Instructions The following transactions were completed by Winklevoss hc., whose fiscal year is the calendar year: July 1 Issued $32,300,000 of 20-year, 9% callable bonds dated July 1, Year 1 at a market (effective) rate of 11%, receiving cash of $27,116,993. Interest is payable semiannually on December 31 and June 30. Dec 31 Borrowed $430,000 by Issuing a six-year, 4% Installment note to Nicks Bank. The note requires annual payments of $82,028, with the first payment occurring on September 30, Year 2. Accrued $4,300 of Interest on the installment note. The Interest is payable on the date of the next Installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual Interest payment. 31 Year 2 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual interest payment Paid the annual payment on the note, which consisted of interest of $17,200 and principal of $64,828. Sept. 30 Dec. 31 Accrued $3,652 of interest on the installment note. The interest is payable on the date of the next Installment note payment. Paid the semiannual interest on the bonds. The bond discount amortization of $129,575 is combined with the semiannual Interest payment 31 Year 3 June 30 Recorded the redemption of the bonds, which were called at 98. The balance in the band discount account is $4,664,707 after payment of interest and amortization of discount have been recorded. Record the redemption only. Pald the second annual payment on the note, which consisted of interest of $14,607 and principal of $67,421 Sept. 30 Required: 1 Joumalize the entries to record the foregoing 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) Year 1 and (b) Year 2 3. Determine the carrying amount of the bonds as of December 31, Year 2. CHART OF ACCOUNTS Winklevoss Inc. General Ledger REVENUE ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation Office Equipment 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 637 Office Supplies Expense 538 Store Supplies Expense 541 Bad Debt Expense LIABILITIES 210 Accounts Payable 221 Salaries Payable LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable 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 EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary Journal 1. Joumalize the entries to record the forgoing transactions. Round all amounts to the newest dolor. Refer to the Chart of Accounts of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION P OST. REY DERIT CREDIT ASSETS LIABILITIES EQUITY Journal 1. Joumalize the entries to record the forgoing transactions. Round all amounts to the newest dolor. Refer to the Chart of Accounts of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION P OST. REY DERIT CREDIT ASSETS LIABILITIES EQUITY HAR JOURNAL PAGE 10 ACCOUNTING EQUATION DATE DESCRIPTION POST. REFA DEBIT C REDIT A SSETS ABILITIES ET Year 3 PAGE 10 ACCOUNTING EQUATION DATE TIE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 5 Final Questions 2. Indicate the amount of the Interest expense in (a) Year 1 and (b) Year 2 a. Year 1: b. Year 2: 3. Determine the carrying amount of the bonds as of December 31, Year 2. Journalize the entries to record the foregoing transactions Round all amounts to the nearest dollar Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REE D ELIT CREDIT ASSETS LIABILITIES EQUITY Year 2 PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION POST. REF. DEBIT CREDIT A SSETS LIABILITIES EQUITY Yoar 3 PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION CREDIT ASSETS LIABILITIES EQUITY LLLL Final Questions 2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. a. Year 1: b. Year 2: 3. Determine the carrying amount of the bonds as of December 31, Year 2 Check My Work