For each of these two independent situations, prepare journal entries to record
ID: 2541014 • Letter: F
Question
For each of these two independent situations, prepare journal entries to record the following. (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.)
Date
Account Titles and Explanation
Debit
Credit
1.
Sheridan Company:
2.
Skysong Company:
1. On January 1, 2017, Sheridan Company issued $348,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2017, Skysong Company issued $300,000 of 11%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1.Explanation / Answer
Answer:
In the books of Sheridan Company:
Date
description
Debit $
Credit $
1-Jan
Cash
348000
Bonds payable
348000
(to record the issuance of bond)
1-Jul
Interest Expense (348000*9%*3/12)
7830
Cash
7830
(to record the inrest payment)
1-Dec
Interest Expense
7830
Interest Payable
7830
(to record the accrual of interest
________________________________________
In the books of Skysong Company:
Date
description
Debit $
Credit $
1-Jan
Cash
313,750
Bonds payable
300,000
Bonds Interest expanses
13750
(300,000*11%*5/12)
(to record the issuance of bond)
1-Jul
Interest Expense
16500
Cash
16500
(300,000*11%*6/12)
(to record the inrest payment)
1-Dec
Interest Expense
16500
Interest Payable
16500
(to record the accrual of interest
Date
description
Debit $
Credit $
1-Jan
Cash
348000
Bonds payable
348000
(to record the issuance of bond)
1-Jul
Interest Expense (348000*9%*3/12)
7830
Cash
7830
(to record the inrest payment)
1-Dec
Interest Expense
7830
Interest Payable
7830
(to record the accrual of interest
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