The following section is taken from Bermuda Corp.'s balance sheet at December 31, 1998:

\section*{Instructions}
(Round all computations to the nearest dollar.)

(a) Journalize the payment of bond interest on January 1, 1999.

(b) Prepare the entry to amortize bond discount and to pay the interest due on July 1 , 1999 .

(c) Assume on July 1, 1999, after paying interest, that Bermuda Corp. calls bonds having a face value of \(\$ 800,000\). The call price is 102 . Record the redemption of the bonds.

(d) Prepare the adjusting entry at December 31, 1999, to amortize bond discount and to accrue interest on the remaining bonds.

Transcribed Image Text:

Current liabilities Bond interest payable (for 6 months from July 1 to December 31) Long-term liabilities Bonds payable, 11%, due January 1, 2009 $2,400,000 Less: Discount on bonds payable $ 132,000 84,000 2,316,000