The following transactions were completed by Winklevoss Inc., whose fiscal year

Question

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

Required:

2016 July 1 Issued $71,100,000 of 20-year, 12% callable bonds dated July 1, 2016, at a market (effective) rate of 14%, receiving cash of $61,621,133. Interest is payable semiannually on December 31 and June 30. Oct. 1 Borrowed $250,000 by issuing a six-year, 5% installment note to Nicks Bank. The note requires annual payments of $49,254, with the first payment occurring on September 30, 2017. Dec. 31 Accrued $3,125 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 discount amortization of $236,972 is combined with the semiannual interest payment. 31 Closed the interest expense account. 2017 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. Sept. 30 Paid the annual payment on the note, which consisted of interest of $12,500 and principal of $36,754. Dec. 31 Accrued $2,666 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 discount amortization of $236,972 is combined with the semiannual 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 $8,530,979 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 $10,662 and principal of $38,592.

Explanation / Answer

the question ssays to use exact wordings of chart of accounts. since i don't have it I have used my own wordings. Pleas change them according to the chart provided to you

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2016 Jul-01 Cash A/c Dr          61,621,133 Discount on Bonds A/c Dr            9,478,867 To 12% Callable Bonds A/c          71,100,000 Oct-01 Cash A/c Dr                250,000 To 5% Note Payable A/c                250,000 Dec-31 Interest on Note Payable A/c Dr                     3,125 To Interest Payable on Notes A/c                     3,125 Dec-31 Interest on Bonds A/c Dr            4,502,972 To Cash A/C            4,266,000 To Discount on Bonds A/c                236,972 Dec-31 Income summary A/c Dr            4,506,097 To Interest on Note Payable A/c                     3,125 To Interest on Bonds A/c            4,502,972 2017 Jun-30 Interest on Bonds A/c Dr            4,502,972 To Cash A/C            4,266,000 To Discount on Bonds A/c                236,972 Sep-01 5% Note Payable A/c Dr                  36,754 Interest Payable on Note A/c Dr                     3,125 Interest on Note Payable A/c Dr                     9,375 To Cash A/c                  49,254 Dec-31 Interest on Note Payable A/c Dr                     2,166 To Interest Payable on Notes A/c                     2,166 Dec-31 Interest on Bonds A/c Dr            4,502,972 To Cash A/C            4,266,000 To Discount on Bonds A/c                236,972 Dec-31 Income summary A/c Dr            9,017,485 To Interest on Note Payable A/c                  11,541 To Interest on Bonds A/c            9,005,944 2018 Jun-30 12% Callable Bonds A/c Dr          71,100,000 Loss on redemption A/c Dr            7,108,979 To Cash A/c          69,678,000 To Discount on Bonds A/c            8,530,979 Sep-30 5% Note Payable A/c Dr                  38,592 Interest Payable on Note A/c Dr                     2,166 Interest on Note Payable A/c Dr                     8,496 To Cash A/c                  49,254

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