The following section is taken from Clampette Oil Company's balance sheet at — Prepare journal entries to December 31, 2007. record interest payments, straight-line premium amortization, and redemption of bonds Current liabilities (SO 5, 6, 8)

Bond interest payable $ 342,000 Long-term liabilities Bonds payable, 9% due January 1, 2018 $3,800,000 Add: Premium on bonds payable 200,000 4,000,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. Clampette uses straight-line amortization for any bond premium or discount.

From December 31, 2007, the bonds will be outstanding for an additional 10 years (120 months).

Instructions

(Round all computations to the nearest dollar.)

(a) Journalize the payment of bond interest on January 1, 2008.

(b) Prepare the entry to amortize bond premium and to accrue interest due on December 31, 2008.

(c) Assume on January 1, 2009, after paying interest, that Clampette Company calls bonds Prepare journal entries to having a face value of $1,900,000. The call price is 102. Record the redemption of record issuance of bonds, interest, and straight-line

(c) Gain $52,000 the bonds. ‘ 3 amortization, and balance

(d) Prepare the adjusting entry at December 31, 2009, to amortize bond premium and ia Ae nie to accrue interest on the remaining bonds. (SO ao 8)