The following section is taken from Fanestill Oil Company's balance sheet at December 31, 2009. Interest is

Question:

The following section is taken from Fanestill Oil Company's balance sheet at December 31, 2009.

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Fanestill uses straight-line amortization for any bond premium or discount. From December 31, 2009, the bonds will be outstanding for an additional 10 years (120 months).
Instructions
(Round all computations to the nearest dollar.)
(a) Journalize the payment of bond interest on January 1, 2010.
(b) Prepare the entry to amortize bond premium and to accrue interest due on December 31, 2010.
(c) Assume on January 1, 2011, after paying interest, that Fanestill Company calls bonds having a face value of $1,800,000. The call price is 102. Record the redemption of the bonds.
(d) Prepare the adjusting entry at December 31, 2011, to amortize bond premium and to accrue interest on the remainingbonds.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...