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Sandhill Corporation issued 4,000, 6%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1. (a)

Sandhill Corporation issued 4,000, 6%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1. (a)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Bond Issuance and Interest Journal Entries Sandhill Corporation issued 4,000, 6%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1. #### (a) Recording the Sale of Bonds Prepare the journal entry to record the sale of these bonds on January 1, 2022. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | January 1, 2022 | | | | | | | | | | | | | | #### (b) Adjusting Entry for Interest Expense Prepare the adjusting journal entry on December 31, 2022, to record interest expense. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | December 31, 2022 | | | | | | | | | | | | | | #### (c) Recording Interest Paid Prepare the journal entry on January 1, 2023, to record interest paid. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | January 1, 2023 | | | | | | | | | | | | | | *Note: Credit account titles are automatically indented when an amount is entered. Do not indent manually.* These exercises guide students in preparing financial journal entries for bond sales and interest-related transactions.
Transcribed Image Text:### Bond Issuance and Interest Journal Entries Sandhill Corporation issued 4,000, 6%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1. #### (a) Recording the Sale of Bonds Prepare the journal entry to record the sale of these bonds on January 1, 2022. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | January 1, 2022 | | | | | | | | | | | | | | #### (b) Adjusting Entry for Interest Expense Prepare the adjusting journal entry on December 31, 2022, to record interest expense. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | December 31, 2022 | | | | | | | | | | | | | | #### (c) Recording Interest Paid Prepare the journal entry on January 1, 2023, to record interest paid. | Date | Account Titles and Explanation | Debit | Credit | |---------------|--------------------------------------------|-----------|-----------| | January 1, 2023 | | | | | | | | | | | | | | *Note: Credit account titles are automatically indented when an amount is entered. Do not indent manually.* These exercises guide students in preparing financial journal entries for bond sales and interest-related transactions.
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