PR 12-4B Entries for bonds payable and installment note transactions OBJ., 3, 4 The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: 2016 July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 2016, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semian- nually on December 31 and June 30. Oct. 1. Borrowed $450,000 by issuing a six-year, 8% installment note to Intexicon Bank. The note requires annual payments of $97,342, with the first payment occurring Dec. 31. on September 30, 2017. on Accrued s9,000 of interest on the installment note. The interest is payable the date of the next installment note payment. 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. (Continued)