Statement of Financial Positiion (partial) December 31, 2013
Non-current liabilities
Bonds payable (face value 2,814,000), 5% due January 1, 2028					3,023,000
Current liabilities
Interest payable (for 12 months from January 1 to December 31)					140,700

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Sandhill uses straight-line amortization for any bond premium or discount. From December 31, 2017, the bonds will be outstanding for an additional 10 years (120 months). Assume the country allows the use of straight line amortization for bond premiums and discounts.

(a)		Journalize the payment of bond interest on January 1, 2018.
(b)		Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2018.
(c)		Assume that on January 1, 2019, after paying interest, Sandhill calls bonds having a face value of 1,125,600. The call price is 102. Record the redemption of the bonds.
(d)		Prepare the adjusting entry at December 31, 2019, to amortize bond premium and to accrue interest on the remaining bonds.

No. Account Titles and Explanation Debit Credit Date 2018 (a) Jan. 1 (b) Dec. 31 2019 (c) Jan. 1 (d) Dec. 31