Question

Instructions 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. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment Dec. 31 2012 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined Dec. 31 Check My Work

Answer 1

Date	General Journal	Debit	Credit
Year 1
1-Jul	Cash	63532267
	Discount on bonds payable	10467733
	Bonds Payable		74000000
31-Dec	Interest expense	4331693
	Discount on bonds payable 10467733/40		261693
	Cash 74000000*11%/2		4070000
Year 2
30-Jun	Interest expense	4331693
	Discount on bonds payable 10467733/40		261693
	Cash 74000000*11%/2		4070000
31-Dec	Interest expense	4331693
	Discount on bonds payable 10467733/40		261693
	Cash 74000000*11%/2		4070000
Year 3
30-Jun	Bonds payable	74000000
	Loss on early redemption	7940961
	cash 74000000*98%		72520000
	Discount on bonds payable		9420961