On December 31, 2020, Sheridan, Inc. sold $3,650,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the accountant for 2020.

Annual Interest Period		Interest to be Paid		Interest Expense		Amortization		Unamortized Amount		Bond Carrying Value
								$91,250		$3,558,750
1		$255,500		$284,700		$29,200		62,050		3,587,950

On the basis of the above information, answer the following questions.

(a1)

What is the stated interest rate for this bond issue?

Stated interest rate

enter the stated interest rate in percentages %

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(a2)

What is the market interest rate for this bond issue?

Market interest rate

enter the market interest rate in percentages %

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(a3)

What was the selling price of the bonds as a percentage of the face value? (Round answer to 1 decimal place, e.g. 52.7.)

Selling price

$enter the selling price in dollars rounded to 1 decimal place

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List of Accounts

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(a4)

Prepare the journal entry to record the sale of the bond issue on December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020	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

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List of Accounts

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(a5)

Prepare the journal entry to record the payment of interest and amortization of discount on December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2021	enter an account title for the journal entry on December 31, 2021	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31, 2021	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31, 2021	enter a debit amount	enter a credit amount