The fiscal year of Russell Inc., a manufacturer of acoustical supplies, ends December 31. Selected transactions for the period 2015 through 2022, involving bonds payable issued by Russell Inc., are as follows:
2015
June 30. Issued $2,000,000 of 25-year, 7% callable bonds dated June 30, 2015, for cash of $1,920,000. Interest is payable semiannually on June 30 and December 31.
Dec. 31. Paid the semiannual interest on the bonds. The bond discount is amortized annually in a separate journal entry.
31. Recorded straight-line amortization of $1,600 of discount on the bonds.

31. Closed the interest expense account.

2016

June 30. Paid the semiannual interest on the bonds. The bond discount is amortized annually in a separate journal entry.

Dec. 31. Paid the semiannual interest on the bonds. The bond discount is amortized annually in a separate journal entry.

31. Recorded straight-line amortization of $3,200 of discount on the bonds.

31. Closed the interest expense account.

2022.
June30. Recorded the redemption of the bonds, which were called at 101.5. The balance in the bond discount account is $57,600 after the payment of interest and amor- tization of discount have been recorded. (Record the redemption only.)

Instructions
1. Journalize entries to record the preceding transactions.

2. Determine the amount of interest expense for 2015 and 2016.

3. Determine the carrying amount of the bonds as of December 31, 2016.

Answer rating: 100% (QA)

1 Journal Date Account Name Debit Credit 2015 Jun 30 Cash 1920000 Discount on bond... View the full answer