Question

Sheridan Company issued $525,000, 15-year, 7% bonds at 96. Your answer is partially correct. Try again. Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2 Jan. 1 Cash Discount on Bonds Payable Bonds Payable

Answer 1

Credit Sheridan Company issued $525,000, 15-year, 7% bonds at 96 Date Accounts and Explanation 01 Jan Cash ($525,000 X 0.96) $ Discount on Bonds Payable ($525,000 X 0.04) Bonds Payable Debit 5,04,000 21,000 $ 5,25,000 SHERIDAN COMPANY Balance sheet (Partial) December 31, 2027 Long term liabilities Bonds Payable Less: Discount on bond payable $ $ 5,25,000 -12,600 $ 5,12,400 Credit Ivanhoe Company issued $650,000, 10-year, 7% bonds at 103 Date Accounts and Explanation 01 Jan Cash ($650,000 X 1.03) $ Bonds Payable Premium on Bonds Payable ($650,000 X 0.03) Debit 6,69,500 6,50,000 10500 IVANHOE COMPANY Balance sheet (Partial) December 31, 2025 Long term liabilities Bonds Payable Add: Premium on bond payable $ 6,50,000 11,700 $ 6,61,700