In auditing the books for Carmichael Corporation as of December 31, 2008, before the accounts are closed, you find the following long-term investment account balance:

Instructions:
1. Give the entries that should have been made relative to the investment in bonds, including any adjusting entries that would be made on December 31, the end of the fiscal year. (Assume that bond premium or discount amortization is by the straight-line method and ignore any potential impact of year-to-year market value changes on the accounting for the bonds.)
2. Give the journal entries required at the end of 2008 to correct and bring the accounts up to date in view of the entries actuallymade.

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Account INVESTMENT IN BIG OIL 9% BONDS (MATURITY DATE JUNE 1, 2012) Balance Date em Debit Credit Debit Credit 2008 Jan. 2Bonds, $200,000 par, acquired at 102 plus accrued interest Mar Proceeds from sale of bonds, $I00,000 par and 206550 206,550 accrued interest 06,000 4.500 00,550 96,050 June Interest received Nov. Amount received on call of bonds, $40,000 par, at 101 plus accrued interest Interest received 41,900 2.700 54,150 51,450 Dec