Sheffield Company issued $648,000 of 10%, 20-year bonds on January 1, 2020, at 104. Interest is payable semiannually on July 1 and January 1. Sheffield Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash Premium on Bonds Payable 25,920 Bonds Payable
Sheffield Company issued $648,000 of 10%, 20-year bonds on January 1, 2020, at 104. Interest is payable semiannually on July 1 and January 1. Sheffield Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash Premium on Bonds Payable 25,920 Bonds Payable
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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Transcribed Image Text:Sheffield Company issued $648,000 of 10%, 20-year bonds on January 1, 2020, at 104. Interest is payable semiannually on July 1 and
January 1. Sheffield Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
The issuance of the bonds.
(b)
The payment of interest and the related amortization on July 1, 2020.
(c)
The accrual of interest and the related amortization on December 31, 2020.
Date
Account Titles and Explanation
Debit
Credit
1/1/20
Cash
Premium on Bonds Payable
25,920
Bonds Payable
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