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Your answer is partially com pare the entry required on De- s are automatically indented whe Dunt titles and enter 0 for the am

Your answer is partially com pare the entry required on De- s are automatically indented whe Dunt titles and enter 0 for the am

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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On September 30, 2012, Sheridan Company issued 10% bonds with a par value of $520,000 due in 20 years. They were issued at 98 and were callable at 105 at any date after September 30, 2017. Because Sheridan Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $880,000 at 103; they mature in 20 years. Sheridan Company uses straight-line amortization. Interest payment dates are March 31 and September 30. (b) Your answer is partially correct. Prepare the entry required on December 31, 2018, to accrue interest and amortize the premium on the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Interest Expense Premium on Bonds Payable Cash Debit 34540 660 Credit 35200
Transcribed Image Text:On September 30, 2012, Sheridan Company issued 10% bonds with a par value of $520,000 due in 20 years. They were issued at 98 and were callable at 105 at any date after September 30, 2017. Because Sheridan Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $880,000 at 103; they mature in 20 years. Sheridan Company uses straight-line amortization. Interest payment dates are March 31 and September 30. (b) Your answer is partially correct. Prepare the entry required on December 31, 2018, to accrue interest and amortize the premium on the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Interest Expense Premium on Bonds Payable Cash Debit 34540 660 Credit 35200
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