On January 1, 2020, Sheffield Limited paid $571,229.50 for 11% bonds with a maturity value of $530,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Sheffield accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Prepare the journal entry to record the bond purchase. (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. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Date Cash Received Interest Income Premium Amortization Carrying Amount of Bonds 01/01/20 12/31/20 12/31/21 12/31/22 2/31/23 2/31/24Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Date Cash Received Interest Income Premium Amortization Carrying Amount of Bonds 01/01/20 12/31/20 $ 12/31/21 12/31/22 12/31/23 12/31/24 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare the journal entry to record interest received and interest income for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent man If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec 31, 2020Prepare the journal entry to record interest received and interest income for 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. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare the journal entry to record the redemption of the bond at maturity. (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. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1, 2025If Sheffield used the straight-line method of discount/premium amortization, prepare the journal entry to record interest received and interest income the company would make each year. (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. Round answers to 2 decimal places, e.g. 52.75.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Compare the total interest income reported over the five-year period under the effective interest method and the straight-line method. (Round answers to 0 decimal places, e.g. 5,275.) Total interest income Effective interest method Straight-line method Total interest income under the two methods
