On January 1, 2021, Sheridan Ltd., a public company, purchased $558,000 of 5-year, 8% bonds at par from Grouper Corporation. Interest is received semi-annually on July 1 and January 1. Sheridan purchased the bonds to earn interest. At December 31, 2021, the bonds were trading at 103.

Prepare the journal entry to record the purchase of the bonds on January 1. (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	select an account title to record purchase of bond investment on January 1 Interest ReceivableInvestments at Amortized CostInterest PayableCashNo EntryInterest ExpenseInterest Revenue	enter a debit amount	enter a credit amount
	select an account title to record purchase of bond investment on January 1 CashInterest ReceivableInterest ExpenseInvestments at Amortized CostInterest PayableInterest RevenueNo Entry	enter a debit amount	enter a credit amount
	(To record purchase of bond investment.)

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Prepare the journal entry to record the receipt of interest on July 1. (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	select an account title to record the Collection of interest revenue Interest RevenueInterest PayableInterest ReceivableNo EntryCashInterest ExpenseInvestments at Amortized Cost	enter a debit amount	enter a credit amount
	select an account title to record the Collection of interest revenue Interest ExpenseInterest RevenueInterest PayableInvestments at Amortized CostInterest ReceivableNo EntryCash	enter a debit amount	enter a credit amount
	(Collection of interest revenue.)

(c)

Prepare any adjusting entries required at December 31. (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	select an account title to accrue interest revenue on December 31 Interest PayableCashInterest RevenueNo EntryInvestments at Amortized CostInterest ExpenseInterest Receivable	enter a debit amount	enter a credit amount
	select an account title to accrue interest revenue on December 31 Interest RevenueCashNo EntryInvestments at Amortized CostInterest PayableInterest ExpenseInterest Receivable	enter a debit amount	enter a credit amount
	(To accrue interest revenue.)
Dec. 31	select an account title to record fair value adjustment on December 31 Interest PayableInterest ExpenseInterest ReceivableNo EntryInvestments at Amortized CostInterest RevenueCash	enter a debit amount	enter a credit amount
	select an account title to record fair value adjustment on December 31 Interest ExpenseInterest RevenueNo EntryCashInterest PayableInvestments at Amortized CostInterest Receivable	enter a debit amount	enter a credit amount
	(To record fair value adjustment.)

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