Western Solar Energy Company issued \(\$ 400,000\) of \(12 \%\) bonds on July 1, 1998, at face value. The bonds are dated July 1, 1998, call for semiannual payments on July 1 and January 1, and mature at the rate of \(\$ 40,000\) per year on July 1, beginning in 2003. The company's accounting period ends on September 30.

Required

a. Prepare journal entries to record the interest expense and payment for the six months ending July 1, 2003; the maturing of the bonds on July 1, 2003; and the adjusting entries needed on September 30, 2003.

b. Show how the bonds would be presented in the company's balance sheet for September 30,2003