Journalize bond interest; amortize bond discount

Company Balance Sheet as of December 31, 2009.

Current liabilities
Bond interest payable $168,000
Long-term liabilities
Bonds payable, 7% due January 1, 2020 $2,400,000
Less: Discount on bonds payable 42,000
2,358,000

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Kuehn 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). (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

a) Journalize the payment of bond interest on January 1, 2010.

b) Assume on January 1, 2011, after paying interest, that Kuehn Corp. calls bonds having a face value of $400,000. The call price is 103. Record the redemption of the bonds.

c) Prepare the adjusting entry at December 31, 2011, to amortize bond discount and to accrue interest on the remaining bonds.

I filled in alot of blanks haphazardly, and got them correct. I'm having difficulty still with the "end of year" e.i. Dec. 31, and beginning of year Jan. 1.

Surely the interest and payables will change because it is a different year once it's Jan 1st. Right? Shouldn't everything be adjusted accordingly? Ugh. I'm right brained and have literally kept my head above water for the entire semester without an ouce of help. This class isn't even required for my degree, but I refused to drop (stubborn) and I want to understand this as best I can. Why take a class that doesn't offer opportunity? My alternative at the time was Gangs 101. That's all that was left. I guess I am getting old now! Sign of the times...