The Sheffield Company issued $300,000 of 10% bonds on January 1, 2017. The bonds
ID: 2329397 • Letter: T
Question
The Sheffield Company issued $300,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 104.
Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Sheffield Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)
No.
Date
Account Titles and Explanation
Debit
Credit
January 1, 2017
July 1, 2017
December 31, 2017
No.
Date
Account Titles and Explanation
Debit
Credit
(a)January 1, 2017
(b)July 1, 2017
(c)December 31, 2017
Explanation / Answer
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General Journal Date Account Tittle & Explanation Debit Credt Jan-17 Cash ($300000*1.04) $3,12,000 Premium on Bond Payable (300000*4%) $12,000 Bond Payable $3,12,000 To Record Issuance of Bond 01-Jul-17 Interest Expense $13,800 Premium on Bond Payable($12000/10 period) $1,200 Cash ($300000*10%*6/12) $15,000 To Record Interest Paid 31-Dec-17 Interest Expense $13,800 Premium on Bond Payable
($12000/10 period) $1,200 Interest Payable $15,000 To Record Interest Due
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