Question

Sheridan Company issues $280,000, 20-year, 10% bonds at 102. Prepare the journal entry to record the sale of these bonds on June 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount

Answer 1

Dr Cash 285,600

Cr Bonds payable 280,000

Cr Premium on bonds payable 5,600

Step-by-step explanation:

Sheridan Company Journal entry

Dr Cash 285,600

Cr Bonds payable 280,000

Cr Premium on bonds payable 5,600

Par value of bonds ×Issue price of bonds

= $280,000 x 102%

=$280,000×1.02

= $285,600