question archive On July 1, 2021, Sandhill Corp
On July 1, 2021, Sandhill Corp
Subject:BusinessPrice: Bought3
On July 1, 2021, Sandhill Corp. issued $ 4,120,000 of 10-year, 5% bonds at $ 4,456,840. This price resulted in a 4% market interest rate on the bonds. The bonds pay semi-annual interest on July 1 and January 1, and Sandhill has a December 31 year end. Record the issue of the bonds on July 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit July 1 (To record issuance of bonds.) Prepare an effective interest amortization table for the first five interest payments for these bonds. (Round answers to 0 decimal places, e.g. 5,275.) SANDHILL CORP. Bond Premium Amortization Table Effective Interest Method—Semi-Annual Interest Payments 5% Bonds Issued at market rate of 4% Date Interest Payment Interest Expense Premium Amortization Bond Amortized Cost July 1, 2021 $ $ $ $ Jan. 1, 2022 July 1, 2022 Jan. 1, 2023 July 1, 2023 Jan. 1, 2024 Record the accrual of interest at December 31, 2021, and the subsequent payment on January 1, 2022. (Round answers to 0 decimal places, e.g. 5,275. 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 (To accrue interest expense.) Jan. 1, 2022 (To record interest payment.) Assuming instead that Sandhill has an August 31 year end, prepare the adjusting entry related to these bonds on August 31, 2021, as well as the subsequent interest payment on January 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Aug. 31, 2021 (To accrue interest expense.) Jan. 1, 2022 (To record interest payment.) Attempts: 0 of 1 used
