On April $1,2020,$ Sheffield Company sold $27,000$ of its $12\%,15-$year, $$1,000$ face value bonds at $97.$ Interest payment dates are April $1$ and October $1,$ and the company uses the straight$-$line method of bond discount amortization. On March $1,2021,$ Sheffield took advantage of favorable prices of its stock to extinguish $4,800$ of the bonds by issuing $158,400$ shares of its $$10$ par value common stock. At this time, the accrued interest was paid in cash. The company$$s stock was selling for $$30$ per share on March $1,2021.$

Prepare the journal entries needed on the books of Sheffield Company to record the following. $($Round intermediate calculations to $6$ decimal places, e$.$g$.1\mathrm{.}251247$ and final answers to $0$ decimal places, e$.$g$.38,548.$ If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$

$($a$)$ April $1,2020$: issuance of the bonds.

$($b$)$ October $1,2020$: payment of semiannual interest.

$($c$)$ December $31,2020$: accrual of interest expense.

$($d$)$ March $1,2021$: extinguishment of $4,800$ bonds. $($No reversing entries made.$)$

Part Date Account Titles and Explanation Debit Credit

a $4/1/20$ Cash $26190000$

Discount on Bonds Payable $810000$

Bonds Payable $27000000$

b $10/1/20$ Interest Expense

Discount on Bonds Payable

Cash $1620000$

c $12/31/20$ Interest Expense $823500$

Discount on Bonds Payable $13500$

Interest Payable $810000$

d $3/1/21$ Interest Expense

Interest Payable $144000$

Cash

Discount on Bonds Payable

$($To record interest and discount on bonds retired$)$

$3/1/21$ Bonds Payable $4800000$

Loss on Redemption of Bonds

Discount on Bonds Payable

Common Stock $1584000$

Paid$-$in Capital in Excess of Par $-$ Common Stock

$($To record extinguishment of the bonds$)$

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Answer:

No$.$ Date Account Titles and Explanation Debit Credit

$($a$)4/1/20$ Cash $[(27000$ bonds $*$ $$1000)*97\%]$ $ $2,61,90,000-$

Discount on Bonds Payable $[$Difference$]$ $ $8,10,000-$

Bonds Payable $[27000$ bonds $*$ $$1000]-$ $ $2,70,00,000$

$($To record issuance of the bonds$)$

$($b$)10/1/20$ Interest Expense $[$Difference$]$ $ $16,47,000-$

Discount on Bonds Payable $[($$$810000/15$ years$)*6/12]-$ $ $27,000$

Cash $[($$$27000000*12\%)*6/12]-$ $ $16,20,000$

$($To record payment of semiannual interest$)$

$($c$)12/31/20$ Interest Expense $[$Difference$]$ $ $8,23,500-$

Discount on Bonds Payable $[($$$810000/15$ years$)*3/12]-$ $ $13,500$

Interest Payable $[($$$27000000*12\%)*3/12]-$ $ $8,10,000$

$($To record accrual of interest expense$)$

$($d$)3/1/21$ Interest Expense $[$Difference$]$ $ $3,97,600-$

Interest Payable $[$$$810000*(4800/27000)]$ $ $1,44,000-$

Discount on Bonds Payable $[($$$810000/15$ years$)*2/12]*4800/27000]-$ $ $1,600$

Cash $[($$$27000000*12\%)*2/12]-$ $ $5,40,000$

$($To record interest and discount on bonds retired$)$

$3/1/21$ Bonds Payable $[4800$ bonds $*$ $$1000]$ $ $48,00,000-$

Loss on redemption of Bond $[$Difference$]$ $ $99,200-$

Discount on bond payable $[($$$837000*4800/27000)-$ $$1600]-$ $ $1,47,200$

Common Stock $[158400$ shares $*$ $$10]-$ $ $15,84,000$

Paid$-$in Capital in Excess of par common stock $[158400$ shares $*$ $$20]$ $ $31,68,000$

$($To record extinguishment of the b