The following is taken from the Sandhill SA statement of financial position. SANDHILL SA Statement of Financial Positiion (partial) December 31, 2013 Non-current liabilities Bonds payable (face value 2,583,000), 7% due January 1, 2028 Current liabilities Interest payable (for 12 months from January 1 to December 31) 2,810,600 180,810 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 1,033,200. The call price is 101. 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. Debit Credit No. Date Account Titles and Explanation 2018 (a) Jan. 1 Interest Payable 180,810 Cash 180,810 (b) Dec. 31 Interest Expense 183393 Bonds Payable 2583 Interest Payable 180,810 2019 (c) Jan. 1 Bonds Payable 1,033,200 Loss on Bond Redemption 10332 Cash 1043532 (d) Dec. 31 Interest Expense 110036 Bonds Payable 1550 Interest Payable 108486