The following is taken from the Magana Corp. balance sheet

Interest is payable semiannually on January 1 and July 1.The bonds are callable on any semiannual interest date. Magana uses straight-line amortization for any bond premium or discount. From December 31, 2011, the bonds will be outstanding for an additional 10 years (120 months).

Instructions
(a) Journalize the payment of bond interest on January 1, 2012.
(b) Prepare the entry to amortize bond discount and to pay the interest due on July 1, 2012, assuming that interest was not accrued on June 30.
(c) Assume that on July 1, 2012, after paying interest, Magana Corp. calls bonds having a face value of $800,000.The call price is 101. Record the redemption of the bonds.
(d) Prepare the adjusting entry at December 31, 2012, to amortize bond discount and to accrue interest on the remainingbonds.

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MAGANA CORPORATION Balance Sheet (partial) December 31, 2011 Current liabilities Bond interest payable (for 6 months from July 1 to December 31) $ 84,000 Long-term liabilities Bonds payable, 7%, due $2,400,000 January 1,2022 Less: Discount on bonds payable 90,000 $2,310,000