Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 41

Entries for bonds payable and installment note transactions
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.