Entries for bonds payable and installment note transactions The following transactions were completed by Montague Inc., whose fiscal year is the calendar year. Year  1   July 1 Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, Year 1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semianually 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 on September 30, Year 2. Dec. 31 Accrued $9,000 of interest on the installment note. The interest is payable on the date of the next installment note payment. 31 Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Year 2   June 30 Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Sept. 30 Paid the annual payment on the note, which consisted of interest of $36,000 and principal of $61,342. Dec. 31 Accrued $7,773 of interest on the installment note.The interest is payable on the date of the next installment note payment. 31 Paid the semiannual interest on the bonds.The bond premium amortization of $390,852 is combined with the semiannual interest payment. Year 3   June 30 Recorded the redemption of the bonds, which were called at 103.The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. Record the redemption only. Sept. 30 Paid the second annual payment on the note, which consisted of interest of $31,093 and principal of $66,249. Instructions  1. Journalize the entries to record the foregoing transactions. 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, Year2.

Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $2,500,000 of 8-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $2,369,220. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1.  Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.     Cash Cash     Discount on Bonds Payable Discount on Bonds Payable     Bonds Payable Bonds Payable     Feedback   Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2.  Journalize the entries to record the following: a.  The first semiannual interest payment on December 31, 20Y1, and the…

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…

Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $8,800,000, 11%, 5-year bond that pays semiannual interest of $484,00 ($8,800,000 x 11% x %2), receiving cash of $8,476,157. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.