Business, 25.05.2021 01:30 bossboybaker

Entries for bonds payable and installment note transactions The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
2016
July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 2016, at a market (effective rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30.
Oct. 1. Borrowed $200,000 by issuing a six-year, 6% installment note to Nicks Bank. The note requires annual payments of $40,673, with the first payment occurring on September 30, 2017.
Dec. 31. Accrued $3,000 of interest on the installment note. The interest is payable on the date of the next installment note payment.
31. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
31. Closed the interest expense account.
2017
June 30. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
Sept. 30. Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $28,673.
Dec. 31. Accrued $2,570 of interest on the installment note. The interest is payable on the dat of the next installment note payment.
31. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
31. Closed the interest expense account.
2018
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).
Sept. 30. Paid the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.
Instructions:
1. Journalize the entries to record the foregoing transactions.
2. Indicate the amount of the interest expense in (a) 2016 and (b) 2017.

Answers: 2

Show answers

Answers

Answer from: hello137348474747

Winklevoss Inc.

Journal Entries:

2016

July 1. Debit Cash $63,532,267

Debit Bonds Discount $10,467,733

Credit 11% Callable Bonds Payable $74,000,000

To record the issuance of 20-year, 11% callable bonds dated

Oct. 1. Debit Cash $200,000

Credit 6% Installment Note Payable (Nicks Bank) $200,000

To record the issuance of a six-year, 6% installment note.

Dec. 31. Debit Interest Expense $3,000

Credit Interest Expense Payable $3,000

To accrue interest for 3 months.

Dec. 31. Debit Interest Expense on Bonds $4,331,693

Credit Bond discount amortization $261,693

Credit Cash $4,070,000

To record the first semiannual interest payment.

Dec. 31. Debit Income Summary $4,334,693

Credit Interest Expense $4,334,693

To close the expense accounts.

2017

June 30. Debit Interest Expense on Bonds $4,331,693

Credit Bond discount amortization $261,693

Credit Cash $4,070,000

To record the second semiannual interest payment.

Sept. 30. Debit 6% Installment Notes Payable $28,673

Debit Interest Expense $9,000

Debit Interest Expense Payable $3,000

Credit Cash $40,673

To record installment payment, including interest.

Dec. 31. Debit Interest Expense $2,570

Credit Interest Expense Payable $2,570

To accrue interest.

Dec. 31. Debit Interest Expense on Bonds $4,331,693

Credit Bond discount amortization $261,693

CreditCash $4,070,000

To record semiannual interest payment.

Dec. 31. Debit Income Summary $4,334,263

Credit Interest Expense $4,334,263

To close the interest expense account.

2018

June 30. Debit 11% Callable Bonds Payable $74,000,000

Credit Bond Discount $1,480,000

Credit Cash $72,520,000

To record the bond redemption only.

Sept. 30. Debit 6% Installment Notes Payable $30,393

Debit Interest Expense $7,710

Debit Interest Expense Payable $2,570

Credit Cash $40,673

To record the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.

Explanation:

a) Data and Analysis:

2016

July 1. Cash $63,532,267 Bonds Discount $10,467,733 11% Callable Bonds Payable $74,000,000 issue of 20-year, 11% callable bonds dated

July 1, 2016, at a market (effective rate of 13%, receiving cash of . Interest is payable semiannually on December 31 and June 30.

Oct. 1. Cash $200,000 6% Installment Note Payable (Nicks Bank) $200,000

issuance of a six-year, 6% installment note to . The note requires annual payments of $40,673, with the first payment occurring on September 30,

2017.

Dec. 31. Interest Expense $3,000 Interest Expense Payable $3,000

Dec. 31. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000

Dec. 31. Income Summary $4,334,693 Interest Expense $4,334,693

2017

June 30. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000

Sept. 30. 6% Installment Notes Payable $28,673 Interest Expense $9,000 Interest Expense Payable $3,000 Cash $40,673

Dec. 31. Interest Expense $2,570 Interest Expense Payable $2,570

Dec. 31. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000

Dec. 31. Income Summary $4,334,263 Interest Expense $4,334,263

2018

June 30. 11% Callable Bonds Payable $74,000,000 Bond Discount $1,480,000 Cash $72,520,000 To record the bond redemption only.

Sept. 30. 6% Installment Notes Payable $30,393 Interest Expense $7,710 Interest Expense Payable $2,570 Cash $40,673

the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.

Answer from: Quest

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.

Answer from: Quest

Planning,organizing, leading, and controlling.

Other questions on the subject: Business

Business, 21.06.2019 21:00, FombafTejanjr3923

The plastic flowerpots company has two manufacturing departments, molding and packaging. at the beginning of the month, the molding department has 2,100 units in inventory, 70% complete as to materials. during the month, the molding department started 18,500 units. at the end of the month, the molding department had 3,150 units in ending inventory, 80% complete as to materials. units completed in the molding department are transferred into the packaging department. cost information for the molding department for the month follows: beginning work in process inventory (direct materials) $ 1,300 direct materials added during the month 28,900 using the weighted-average method, compute the molding department's (a) equivalent units of production for materials and (b) cost per equivalent unit of production for materials for the month. (round "cost per equivalent unit of production" to 2 decimal places.)

Answers: 1

continue

Business, 22.06.2019 02:30, Roof55

When interest is compounded continuously, the amount of money increases at a rate proportional to the amount s present at time t, that is, ds/dt = rs, where r is the annual rate of interest. (a) find the amount of money accrued at the end of 3 years when $4000 is deposited in a savings account drawing 5 3 4 % annual interest compounded continuously. (round your answer to the nearest cent.) $ (b) in how many years will the initial sum deposited have doubled? (round your answer to the nearest year.) years (c) use a calculator to compare the amount obtained in part (a) with the amount s = 4000 1 + 1 4 (0.0575) 3(4) that is accrued when interest is compounded quarterly. (round your answer to the nearest cent.) s = $

Answers: 1

continue

Business, 22.06.2019 05:10, mariap3504

Responsible for setting the goals and planning for the future as well as leading and controlling the work of others. out the decisions of top management. often responsible for various departments such as the production, marketing, and accounting departments. process or function of planning organizing leading and controlling. the resources arranged in an orderly and functional way to accomplish goals and objectives. the company on track and making sure goals are met. for the daily operations of a business. examples of this are supervisors, office managers, and crew leaders. act or process of creating goals and objectives as well as the strategies to meet them. for the daily operations of a business. examples of this are supervisors, office managers, and crew leaders. how the firm is structured and who is in charge of whom. direction and vision

Answers: 3

continue

Business, 22.06.2019 10:00, makennskyee1198

Carrie works at a canned food production factory. the government wanted to give a boost to the salt industry, so it lined up numerous subsidies and tax exemptions for the sector. this lead to a decrease in production costs. this also meant that consumers could access canned foods at a lower price, which lead to an increase in demand for the product. which kind of economic system is carrie’s company dealing with? carrie’s company is dealing with a/an economy.

Answers: 2

continue

You know the right answer?

Entries for bonds payable and installment note transactions The following transactions were complet...