Question

On January 1, 2020, Sheridan Company sold 12% bonds having a maturity value of $550,000 for $637,838, which provides the bondholders with a 8% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Sheridan Company allocates interest and unamortized discount or premium on the effective-interest basis. ✓ Your answer is correct. Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, eg 38,548. If no entry is required, select "No Entry"for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation January 1, 2020 Cash Debit 637838 Bonds Payable 550000 | Premium on Bonds Payable 87838 e Textbook and Media List of Accounts Attempts: 2 of 3 used Prepare a schedule of interest expense and bond amortization for 2020-2022. (Round answer to 0 decimal places, eg 38,548.) Schedule of Interest Expense and Bond Premium Amortization Effective-Interest Method Interest Premium Expense Amortized Cash Paid Carrying Amount of Bonds Date 1/1/20 $ 12/31/20 12/31/21 12/31/22 e Textbook and Media List of Accounts

Answer 1

Amortization table

Date	cash paid	Interest expense	Premium amortized	Carrying amount of bonds
1/1/20				637838
12/31/2020	66000	51027	14973	622865
12/31/2021	66000	49829	16171	606694
12/31/2022	66000	48536	17464	589230