Question

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

20Y1
July	1	Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 20Y1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30.
Dec.	31	Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment.

20Y2
June	30	Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment.
Dec.	31	Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment.
20Y3
June	30	Recorded the redemption of 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.)

Required:

1.	Journalize the entries to record the 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) 20Y1 and (b) 20Y2.
3.	Determine the carrying amount of the bonds as of December 31, 20Y2. 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. Enter amounts as positive number. 20Y1: 20Y2: 3. Determine the carrying amount of the bonds as of December 31, 20Y2.

Answer 1

According to data - P. No.1 Now we Calculate the journal entries were Completed by winklevoss Inc., whose fiscal year is the calendar year.new Date General Journal Debit Credit Jan - 이 Doyl Cash $10,467,733 $ 74,000,000 - $63,532, 267) Discount on bande payable $ 63,539,267 Bonds payable $ 74,000,000 to record issued 44,000,000 bonds of 20 year 11% Callable bonds) Interest expense $4,331,693 $ 961,693 + $4,070,000) $ 261,693 Discount Cash $4,070,000 74,000,000 x 11.7. x 6/12) to record interent expense for 6 months

P.2 2012 $4,331,693 Jun 30 $ 261,693 Interest expense 961,693 + $4,070,000) Discount on Bond Cash $ 74,000,000 x 1l 7. 6112) to record interest expo for 6 month Interest expense 961,693 + $4,070,000 $4,070,000 Dec-31 $ 4,331,693 $ 961,693 $4,070,000 Discount on Bond Cash 74,000,000 xlly. x 6/12) To record interest To expense for 6 month) $ 74,000,000 Jun 3043 Bonds payable $ 7,940,961 -30 locs on redemption Discount on bonds payable Cash ($ 74,000,000 x 989) fro gecord redemption on bonds @ 98 on $74,000,000 $ 9,420,961 $ 79,520,000

P. No.3 Amount of the interest expens in A 2011- interest paid on 11% Callable bonds $4,070,000 for 6 month (4.74,000,000 x 110%. x Add: Discount on bond for 6 months $ 961,693 6/12) Interest expense in goyi $ 4,331,693 $ 8,140,000 000 B 2012: interest paid on 11% Callable bonds for 1 year $ 74,000, Add :- Discount on Bond for 1 year (+ 261, 613 x2) Interest expense in doya x 110.) $523, 386 $ 8,663, 386

3) P.4 $74,000,000 Caroying amount of the bonds as of December 31, 2012 face value of bonds les original discount on payable (see in jul 1 doyl transaction les : Discount on bonds till Doya ($ 261,693+ $ 593, 386 $ 63,532, 267 $ 785,079) ($ 69,747,182 1 So, Carrying amount of the bonds as of Dec 31, 2012 $ 11,952,812 please vote positively