On January 1, 2022, Sheridan Company issued $2,060,000 face value, 8%, 10-year bonds at $1,927,796. This price resulted in an effective-interest rate of 9% on the bonds. Sheridan uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2022 enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount eTextbook and Media Assistance Used List of Accounts Attempts: 1 of 5 used (b) Correct answer iconYour answer is correct. Prepare an amortization table through December 31, 2024 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.) Sheridan Company Bond Discount Amortization Effective-Interest Method—Annual Interest Payments Annual Interest Periods Interest to Be Paid Interest Expense to Be Recorded Discount Amortization Unamortized Discount Bond Carrying Value Issue date $enter Unamortized Premium in dollars $enter Bond Carrying Value in dollars 1 $enter Interest to Be Paid in dollars $enter Interest Expense in dollars $enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars 2 enter Interest to Be Paid in dollars enter Interest Expense in dollars enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars 3 enter Interest to Be Paid in dollars enter Interest Expense in dollars enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars eTextbook and Media List of Accounts Attempts: 2 of 5 used (c) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2022. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2022 enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount eTextbook and Media
On January 1, 2022, Sheridan Company issued $2,060,000 face value, 8%, 10-year bonds at $1,927,796. This price resulted in an effective-interest rate of 9% on the bonds. Sheridan uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2022 enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount eTextbook and Media Assistance Used List of Accounts Attempts: 1 of 5 used (b) Correct answer iconYour answer is correct. Prepare an amortization table through December 31, 2024 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.) Sheridan Company Bond Discount Amortization Effective-Interest Method—Annual Interest Payments Annual Interest Periods Interest to Be Paid Interest Expense to Be Recorded Discount Amortization Unamortized Discount Bond Carrying Value Issue date $enter Unamortized Premium in dollars $enter Bond Carrying Value in dollars 1 $enter Interest to Be Paid in dollars $enter Interest Expense in dollars $enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars 2 enter Interest to Be Paid in dollars enter Interest Expense in dollars enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars 3 enter Interest to Be Paid in dollars enter Interest Expense in dollars enter Discount Amortization in dollars enter Unamortized Premium in dollars enter Bond Carrying Value in dollars eTextbook and Media List of Accounts Attempts: 2 of 5 used (c) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2022. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2022 enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on december 31, 2022 enter a debit amount enter a credit amount eTextbook and Media
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
Related questions
Question
On January 1, 2022, Sheridan Company issued $2,060,000 face value, 8%, 10-year bonds at $1,927,796. This price resulted in an effective-interest rate of 9% on the bonds. Sheridan uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1.
(a)
Correct answer iconYour answer is correct.
Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
---|---|---|---|
Jan. 1, 2022
|
enter an account title for the journal entry on January 1, 2022
|
enter a debit amount
|
enter a credit amount
|
enter an account title for the journal entry on January 1, 2022
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title for the journal entry on January 1, 2022
|
enter a debit amount
|
enter a credit amount
|
eTextbook and Media
Assistance Used
List of Accounts
Attempts: 1 of 5 used
(b)
Correct answer iconYour answer is correct.
Prepare an amortization table through December 31, 2024 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.)
Sheridan Company
Bond Discount Amortization Effective-Interest Method—Annual Interest Payments |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Annual Interest Periods
|
Interest to Be Paid
|
Interest Expense
to Be Recorded |
Discount Amortization
|
Unamortized Discount
|
Bond Carrying Value
|
|||||
Issue date
|
$enter Unamortized Premium in dollars
|
$enter Bond Carrying Value in dollars
|
||||||||
1
|
$enter Interest to Be Paid in dollars
|
$enter Interest Expense in dollars
|
$enter Discount Amortization in dollars
|
enter Unamortized Premium in dollars
|
enter Bond Carrying Value in dollars
|
|||||
2
|
enter Interest to Be Paid in dollars
|
enter Interest Expense in dollars
|
enter Discount Amortization in dollars
|
enter Unamortized Premium in dollars
|
enter Bond Carrying Value in dollars
|
|||||
3
|
enter Interest to Be Paid in dollars
|
enter Interest Expense in dollars
|
enter Discount Amortization in dollars
|
enter Unamortized Premium in dollars
|
enter Bond Carrying Value in dollars
|
eTextbook and Media
List of Accounts
Attempts: 2 of 5 used
(c)
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2022. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
---|---|---|---|
Dec. 31, 2022
|
enter an account title for the journal entry on december 31, 2022
|
enter a debit amount
|
enter a credit amount
|
enter an account title for the journal entry on december 31, 2022
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title for the journal entry on december 31, 2022
|
enter a debit amount
|
enter a credit amount
|
eTextbook and Media
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