Question

On January 1, 2021, Sheridan Satellites issued $1,200,000, 10-year bonds. The bonds pay semi-annual interest on July 1 and January 1, and Sheridan has a December 31 year end. A partial bond amortization schedule is presented below:

Semi-Annual Interest Period		Interest Payment		Interest Expense		Amortization			Bond Amortized Cost
Jan. 1, 2021									$1,114,726
July 1, 2021		$ [1]		$ [2]		$3,015			1,117,741
Jan. 1, 2022		36,000		39,121		3,121			1,120,862
July 1, 2022		36,000		39,230		[3]			1,124,092
Jan. 1, 2023		36,000		39,343		[4]			[5]
July 1, 2023		36,000		39,460		3,460			1,130,895
Jan. 1, 2024		36,000		39,581		3,581			1,134,476

What is the face value of the bonds?

Face value of the bonds

$

Record the issue of the bonds on January 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
Jan. 1, 2021
	(To record issuance of bonds.)

Record the interest payment 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, 2021
	(To record interest payment.)

Answer 1

1.)

Face Value of the Bonds

$ 1,200,000

2.)	Date	General Journal	Debit $	Credit $
	Jan.1 ,2021	Cash	1,114,726
		Discount on Bond Payable	85,274
		Bond Payable		1,200,000
3.)	Date	General Journal	Debit $	Credit $
	July 1,2021	Interest Expense	39,015
		Discount on Bond Payable		3,015
		Cash		36,000

4.)	Date	General Journal	Debit $	Credit $
	Dec.31,2021	Interest Expense	39,121
		Discount on Bond Payable		3,121
		Interest Payable		36,000