The following section is taken from Lois Corp.s balance sheet at December 31, 2011. Current liabilities Interest

Question:

The following section is taken from Lois Corp.’s at December 31, 2011.
Current liabilities
Interest payable .............$ 84,000
Long-term liabilities
Bonds payable (7%, due January 1, 2016) .....1,200,000
Interest is payable annually on January 1. The bonds are callable on any annual interest date.

Instructions
(a) Journalize the payment of the bond interest on January 1, 2012.
(b) Assume that on January 1, 2012, after paying interest, Lois Corp. calls bonds having a of $300,000. The call price is 104. Record the redemption of the bonds.
(c) Prepare the adjusting entry on December 31, 2012, to accrue the interest on the remaining bonds.

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
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