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The following amortization and interest schedule reflects the issuance of 10-year bonds by Sheridan Corporation on January 1, 2019 and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Year 1/1/2019 2020 2019 $16,000 2021 2022 2023 2024 2025 2026 2027 2028 Cash Amortization Schedule 16,000 Date 16,000 January 1, 2019 16,000 16,000 16,000 Date 16,000 December 31, 2019 16,000 16,000 The stated rate 16,000 The effective rate Interest $17,977 18,274 18,615 19,007 19,458 19,977 20,574 21,260 22,049 22,960 Carrying Value $40,151 $119,849 38,174 35,900 33,285 Amount Unamortized 30,278 26,820 22,843 18,269 13,009 6,960 a. Indicate whether the bonds were issued at a premium or a discount. b. Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. c. Determine the stated interest rate and the effective-interest rate. 121,826 Account Titles and Explanation 124,100 % 126,715 129,722 133,180 137,157 % Account Titles and Explanation 141,731 d. On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2019. (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) 146,991 153,040 160,000 e. On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for 2019. (Interest is paid January 1.) (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Debit Credit Debit Credit

The following amortization and interest schedule reflects the issuance of 10-year bonds by Sheridan Corporation on January 1, 2019 and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Year 1/1/2019 2020 2019 $16,000 2021 2022 2023 2024 2025 2026 2027 2028 Cash Amortization Schedule 16,000 Date 16,000 January 1, 2019 16,000 16,000 16,000 Date 16,000 December 31, 2019 16,000 16,000 The stated rate 16,000 The effective rate Interest $17,977 18,274 18,615 19,007 19,458 19,977 20,574 21,260 22,049 22,960 Carrying Value $40,151 $119,849 38,174 35,900 33,285 Amount Unamortized 30,278 26,820 22,843 18,269 13,009 6,960 a. Indicate whether the bonds were issued at a premium or a discount. b. Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. c. Determine the stated interest rate and the effective-interest rate. 121,826 Account Titles and Explanation 124,100 % 126,715 129,722 133,180 137,157 % Account Titles and Explanation 141,731 d. On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2019. (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) 146,991 153,040 160,000 e. On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for 2019. (Interest is paid January 1.) (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Debit Credit Debit Credit

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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The following amortization and interest schedule reflects the issuance of 10-year bonds by Sheridan Corporation on January 1, 2019. and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Year 1/1/2019 2020 2019 $16,000 2021 2022 2023 2024 2025 2026 2027 2028 Cash Amortization Schedule 16,000 Date 16,000 16,000 January 1, 2019 16,000 Date 16,000 The stated rate December 31, 2019 16,000 The effective rate Interest $17,977 18,274 16,000 19,977 16,000 20,574 16,000 21,260 18,615 19,007 19,458 22,049 22,960 Carrying Value $40,151 $119,849 38,174 35,900 33,285 Amount Unamortized 30,278 26,820 22,843 18,269 13,009 6,960 a. Indicate whether the bonds were issued at a premium or a discount. b. Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. c. Determine the stated interest rate and the effective-interest rate. 121,826 Account Titles and Explanation 124,100 % 126,715 % d. On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2019. (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation 129,722 133,180 137,157 141,731 146,991 153,040 160,000 e. On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for 2019. (Interest is paid January 1.) (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Debit Credit Debit Credit
Transcribed Image Text:The following amortization and interest schedule reflects the issuance of 10-year bonds by Sheridan Corporation on January 1, 2019. and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Year 1/1/2019 2020 2019 $16,000 2021 2022 2023 2024 2025 2026 2027 2028 Cash Amortization Schedule 16,000 Date 16,000 16,000 January 1, 2019 16,000 Date 16,000 The stated rate December 31, 2019 16,000 The effective rate Interest $17,977 18,274 16,000 19,977 16,000 20,574 16,000 21,260 18,615 19,007 19,458 22,049 22,960 Carrying Value $40,151 $119,849 38,174 35,900 33,285 Amount Unamortized 30,278 26,820 22,843 18,269 13,009 6,960 a. Indicate whether the bonds were issued at a premium or a discount. b. Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. c. Determine the stated interest rate and the effective-interest rate. 121,826 Account Titles and Explanation 124,100 % 126,715 % d. On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2019. (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation 129,722 133,180 137,157 141,731 146,991 153,040 160,000 e. On the basis of the schedule above, prepare the journal entry or entries to record the bond transactions and accruals for 2019. (Interest is paid January 1.) (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Debit Credit Debit Credit
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