On April 1, 2023, Sheridan Corp. sold 11,000 of its $900 face value, 15-year, 10% bonds at 98. Interest payment dates are April 1 and October 1. The company follows ASPE and uses the straight-line method of bond discount amortization. On March 1, 2024, Sheridan extinguished 2,750 of the bonds by issuing 80,000 shares. At this time, the accrued interest was paid in cash to the bondholders whose bonds were being extinguished. In a separate transaction on March 1, 2024, 120, 000 of the company's shares sold for $32 per share .a.Prepare Sheridan's journal entry to record the issuance of the bonds on April 1, 2023 DR.cash 9702000 Cr.bonds payable 9702000 b.Prepare Sheridan's journal entry to record the payment of the semi-annual interest on October 1, 2023. Dr. interest expense5016000 Cr.cash 495000 Cr.bonds payable 6600 c.Prepare Sheridan's journal entry to record the accrual of the interest expense on December 31, 2023. Dr. interest expense 250800 Cr,interest payable 247500 Cr.bonds payable 3300. d. Prepare Sheridan Corp.'s journal entries to record the extinguishment of 2,750 bonds by the issuance of common shares (no reversing entries are made) on March 1, 2024. Dr. interest expense ? Dr.interest payable 61875 Cr.cash 103125 Cr. bonds payable? (To record payment of interest to bondholders) and then (To record extinguishment of the bonds) Dr. bonds payable ? Dr. loss on redemption of bonds? Cr. common shares? what is the amount for the ?
On April 1, 2023, Sheridan Corp. sold 11,000 of its $900 face value, 15-year, 10% bonds at 98. Interest payment dates are April 1 and October 1. The company follows ASPE and uses the straight-line method of bond discount amortization. On March 1, 2024, Sheridan extinguished 2,750 of the bonds by issuing 80,000 shares. At this time, the accrued interest was paid in cash to the bondholders whose bonds were being extinguished. In a separate transaction on March 1, 2024, 120, 000 of the company's shares sold for $32 per share .a.Prepare Sheridan's journal entry to record the issuance of the bonds on April 1, 2023 DR.cash 9702000 Cr.bonds payable 9702000 b.Prepare Sheridan's journal entry to record the payment of the semi-annual interest on October 1, 2023. Dr. interest expense5016000 Cr.cash 495000 Cr.bonds payable 6600 c.Prepare Sheridan's journal entry to record the accrual of the interest expense on December 31, 2023. Dr. interest expense 250800 Cr,interest payable 247500 Cr.bonds payable 3300. d. Prepare Sheridan Corp.'s journal entries to record the extinguishment of 2,750 bonds by the issuance of common shares (no reversing entries are made) on March 1, 2024. Dr. interest expense ? Dr.interest payable 61875 Cr.cash 103125 Cr. bonds payable? (To record payment of interest to bondholders) and then (To record extinguishment of the bonds) Dr. bonds payable ? Dr. loss on redemption of bonds? Cr. common shares? what is the amount for the ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On April 1, 2023, Sheridan Corp. sold 11,000 of its $900 face value, 15-year, 10% bonds at 98. Interest payment dates are
April 1 and October 1. The company follows ASPE and uses the straight-line method of bond discount amortization. On
March 1, 2024, Sheridan extinguished 2,750 of the bonds by issuing 80,000 shares. At this time, the accrued interest was
paid in cash to the bondholders whose bonds were being extinguished. In a separate transaction on March 1, 2024, 120,
000 of the company's shares sold for $32 per share .a.Prepare Sheridan's journal entry to record the issuance of the
bonds on April 1, 2023 DR.cash 9702000 Cr.bonds payable 9702000 b.Prepare Sheridan's journal entry to record the
payment of the semi-annual interest on October 1, 2023. Dr. interest expense5016000 Cr.cash 495000 Cr.bonds payable
6600 c.Prepare Sheridan's journal entry to record the accrual of the interest expense on December 31, 2023. Dr. interest
expense 250800 Cr,interest payable 247500 Cr.bonds payable 3300. d. Prepare Sheridan Corp.'s journal entries to record
the extinguishment of 2,750 bonds by the issuance of common shares (no reversing entries are made) on March 1, 2024.
Dr. interest expense ? Dr.interest payable 61875 Cr.cash 103125 Cr. bonds payable? (To record payment of interest to
bondholders) and then (To record extinguishment of the bonds) Dr. bonds payable ? Dr. loss on redemption of bonds ?
Cr. common shares? what is the amount for the ?
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