The following section is taken from Ohlman Ltd.’s. statement of financial position at December 31, 2024.

Bond interest is payable annually on January 1. The bonds are callable on any interest date.

Instructions

a. Journalize the payment of the bond interest on January 1, 2025.

b. Assume that on January 1, 2025, after paying interest, Ohlman calls bonds having a face value of HK$6,000,000. The call price is 103. Record the redemption of the bonds.

c. Prepare the entry to record the accrual of interest on December 31, 2025.

Transcribed Image Text:

Non-current liabilities Bonds payable, 7%, due January 1, 2029 HK$16,000,000 Current liabilities Interest payable 1,120,000