A review of the accounting records at Corless Co. revealed the following information concerning the company's liabilities that were outstanding at December 31, 2017, and 2016, respectively: (Note: This is an analytical assignment involving the interpretation of financial statement disclosures.)

Debt (Thousands)	2017		Year-End Interest Rate		2016		Year-End Interest Rate
Short-term debt:
Working capital loans	$	163	4.00	%	$	124	3.50	%
Current maturities of long-term debt		52	3.00	%		52	3.00	%
Long-term debt:
Debenture bonds due in 2034		260	4.50	%		260	4.50	%
Serial bonds due in equal annual installments		156	3.00	%		208	3.00	%

1. Corless Co. has not yet made an adjustment to accrue the interest expense related to its working capital loans for the year ended December 31, 2017. Assume that the amount of interest to be accrued can be accurately estimated using an average-for-the-year interest rate applied to the average liability balance. Use the horizontal model to record the effect of the 2017 interest accrual for working capital loans. (Use amounts with + for increases and amounts with for decreases.)
2. Corless Co. has not yet made an adjustment to accrue the interest expense related to its working capital loans for the year ended December 31, 2017. Assume that the amount of interest to be accrued can be accurately estimated using an average-for-the-year interest rate applied to the average liability balance. Record the journal entry to record the effect of the 2017 interest accrual for working capital loans. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in dollars, not in thousands of dollars, i.e. 1,234,567.)
3. Note that the dollar amount and interest rate of the current maturities of long-term debt have not changed from 2016 to 2017. Does this mean that the $52,000 amount owed at the end of 2016 still has not been paid as of December 31, 2017? (Hint: Explain your answer with reference to other information provided in the problem.)

4. Assume that the debenture bonds were originally issued at their face amount. However, the market rate of interest for bonds of similar risk has decreased significantly in recent years and is 2% at December 31, 2017.

Would the market value of Corless Co.'s debenture bonds be more than or less than the $260,000 reported amount?

	The market value would be more than the book value of $260,000
	The market value would be less than the book value of $260,000.
	The market value would be equal to the book value of $260,000.

Is this good news or bad news to the management of Corless Co.?

		Good news
		Bad news

5. When the Serial Bonds account decreased during the year, what other account was affected, and how was it affected? Use the horizontal model to record the effect of this transaction. (Use amounts with + for increases and amounts with for decreases.)
6. When the Serial Bonds account decreased during the year, what other account was affected, and how was it affected? Record the journal entry to record the effect of this transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in dollars, not in thousands of dollars, i.e. 1,234,567.)