Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 5

Entries for bonds payable, including bond redemption
The following transactions were completed by Montague Inc., whose fiscal year is the calendar year:

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, Year 2.