The following is taken from the Walenda Oil Company balance sheet at December \(31,1996: \square\)

Interest is payable semiannually on January 1 and July 1. The bonds are callable on any semiannual interest date. Walenda uses straight-line amortization for any bond premium or discount. From December 31, 1996, the bonds will be outstanding for an additional 10 years ( 120 months). Assume no interest is accrued on June 30.
\section*{Instructions}

(a) Journalize the payment of bond interest on January 1, 1997.

(b) Prepare the entry to amortize bond premium and to pay the interest due on July 1 , 1997.

(c) Assume on July 1, 1997, after paying interest, that Walenda Company calls bonds having a face value of \(\$ 1,800,000\). The call price is 101 . Record the redemption of the bonds.

(d) Prepare the adjusting entry at December 31, 1997, to amortize bond premium and to accrue interest on the remaining bonds.

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Current liabilities Bond interest payable (for 6 months from July 1 to December 31) Long-term liabilities Bonds payable, 12% due January 1, 2007 Add: Premium on Bonds Payable $ 216,000 $3,600,000 300,000 $3,900,000