This Question Contains two parts. Students have to solve both the parts.

(A). Gulf Stone company issued OMR 400000 of 12 % bonds of 100 OMR each on January 1 2011. The bonds are due January 1 ,2016 with the interest payable each July 1 and January 1. The bonds are issued at face value . Prepare Gulf Stone journal entry for (A) January issuance (B) July 1 Interest Payment .

Assume the bonds are issued at OMR 111 to yield 9 %. Prepare the journal entries (C) January 1 for issue (D) July 1 for interest payment (E) December 31 for interest amount due.