The following section is taken from Ohlman Corp.s balance sheet at December 31, 2013. Current liabilities Interest

Question:

The following section is taken from Ohlman Corp.’s at December 31, 2013.
Current liabilities
Interest payable ................ $ 56,000
Long-term liabilities
Bonds payable, 7%, due January 1, 2018 ...... 1,600,000
Bond interest is payable semiannually on January 1 and July 1. The bonds are callable on any interest date.

Instructions
(a) Journalize the payment of the bond interest on January 1, 2014.
(b) Assume that on January 1, 2014, after paying interest, Ohlman calls bonds having a of $600,000. The call price is 103. Record the redemption of the bonds.
(c) Prepare the entry to record the payment of interest on July 1, 2014, assuming no previous accrual of interest on the remaining bonds.

Balance Sheet
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