Sheridan Company commonly issues long term notes payable to its various lenders Sheridan has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8 on an annual basis) Harper has elected to use the fair value option for the long term notes issued to Barclays Bank and has the following data related to the carrying and fair value for these notes Carrying Value Fair Value December 31, 2020 $109,000 $109,000 December 31, 2021 100,800 96,300 December 31, 2022 81,000 87,300 Prepare the adjusting entry at December 31 (Sheridan's year end) for 2020, 2021, and 2022 to record the fair value option for these notes Date Account Titles and Explanation Debit Credit December 31, 2020 Date Account Titles and Explanation Debit Credit December 31, 2021 Date Account Titles and Explanation Debit Credit December 31, 2022 At what amount will the note be reported on Sheridan's 2021 balance sheet Amount $ What is the effect of recording the fair value option on these notes on Sheridan's 2022 income Income will decreaseincrease by $

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Question: Sheridan Company commonly issues long-term notes payable to its various lenders. Sheridan has had a pretty good credit rating such that its effective borrowing rate

Sheridan Company commonly issues long-term notes payable to its various lenders. Sheridan has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Harper has elected to use the fair value option for the long-term notes issued to Barclays Bank and has the following data related to the carrying and fair value for these notes.

	Carrying Value	Fair Value
December 31, 2020	$109,000	$109,000
December 31, 2021	100,800	96,300
December 31, 2022	81,000	87,300

Prepare the adjusting entry at December 31 (Sheridan's year-end) for 2020, 2021, and 2022 to record the fair value option for these notes.

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020

Date	Account Titles and Explanation	Debit	Credit
December 31, 2021

Date	Account Titles and Explanation	Debit	Credit
December 31, 2022

At what amount will the note be reported on Sheridan's 2021 balance sheet?

Amount

What is the effect of recording the fair value option on these notes on Sheridan's 2022 income?

Income will

decreaseincrease

by $

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