On September 1, 2021, Sheridan Corporation issued $625,000 of 10-year, 3% bonds at 96. Interest is...

 

Transcribed Image Text:

On September 1, 2021, Sheridan Corporation issued $625,000 of 10-year, 3% bonds at 96. Interest is payable semi-annually on September 1 and March 1. Sheridan's fiscal year end is February 28. Is the market rate of interest higher or lower than 3% ? Market interest rate is V than 3%. Record the issue of the bonds on September 1, 2021. (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.) Date Account Titles and Explanation Sept. 1 (To record issuance of bonds.) Debit Credit Record the accrual of interest on February 28, 2022, assuming the semi-annual amortization amount for this interest period is $1,055. (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.) Date Account Titles and Explanation Feb. 28 (To accrue interest expense.) Date Account Titles and Explanation Mar. 1 Record the payment of interest on March 1, 2022. (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.) Debit (To record interest payment.) Credit Debit Credit On September 1, 2021, Sheridan Corporation issued $625,000 of 10-year, 3% bonds at 96. Interest is payable semi-annually on September 1 and March 1. Sheridan's fiscal year end is February 28. Is the market rate of interest higher or lower than 3% ? Market interest rate is V than 3%. Record the issue of the bonds on September 1, 2021. (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.) Date Account Titles and Explanation Sept. 1 (To record issuance of bonds.) Debit Credit Record the accrual of interest on February 28, 2022, assuming the semi-annual amortization amount for this interest period is $1,055. (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.) Date Account Titles and Explanation Feb. 28 (To accrue interest expense.) Date Account Titles and Explanation Mar. 1 Record the payment of interest on March 1, 2022. (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.) Debit (To record interest payment.) Credit Debit Credit

Answer rating: 100% (QA)

Answer Market interest rate is Higher than 3 Date Account Title Deb... View the full answer