On January 1, 2021, Sweet Acacia Ltd. issued bonds with a maturity value of $5.35 million for $5,132,790, when the market rate of interest was 8%. The bonds have a contractual interest rate of 7% and mature on January 1, 2026. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. On January 1, 2021, Sheridan Company, a public company, purchased Sweet Acacia Ltd. bonds with a maturity value of $1.07 million to earn interest. On December 31, 2021, the bonds were trading at 99. Both companies year end is December 31.

What amount did Sheridan Company pay for Sweet Acacia Ltd.s bonds? (Round answer to 0 decimal places, e.g. 5,275.)

Sheridan Company paid

$

Prepare the journal entry for Sheridan Company (investor) on January 1, 2021.

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Bonds PayableInvestments at Amortized CostInterest RevenueInterest ReceivableInterest ExpenseNo EntryInvestment Income or LossInterest PayableCashGain on Sale of Bonds
	Interest RevenueCashInterest ReceivableGain on Sale of BondsBonds PayableNo EntryInvestment Income or LossInvestments at Amortized CostInterest PayableInterest Expense
	(To record purchase of investment.)

Prepare a bond amortization schedule for Sheridan Company for the first four interest periods. (Round answers to 0 decimal places, e.g. 5,275.)

Bond Discount Amortization Table Effective Interest Method-Semi-annual Interest Payments 7% Bonds Issued at market rate of 8%
Date		(A) Interest Received		(B) Interest Revenue		(C) Discount Amortization		(D) Bond Amortized Cost
Jan. 1, 2021								$
July 1, 2021		$		$		$
Jan. 1, 2022
July 1, 2022
Jan. 1, 2023

Prepare the journal entries for Sheridan Company to record: (1) The receipt of interest 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. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
July 1	No EntryInterest RevenueInterest ReceivableGain on Sale of BondsInvestments at Amortized CostInterest PayableInterest ExpenseInvestment Income or LossCashBonds Payable
	Interest ReceivableInterest PayableCashInterest RevenueInvestments at Amortized CostInterest ExpenseBonds PayableNo EntryGain on Sale of BondsInvestment Income or Loss
	Interest ReceivableBonds PayableInterest PayableCashInvestment Income or LossInterest RevenueGain on Sale of BondsNo EntryInvestments at Amortized CostInterest Expense
	(To record collection of interest on bonds.)

(2) The accrual of interest on December 31, 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 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	CashInvestments at Amortized CostGain on Sale of BondsInterest ExpenseInterest PayableBonds PayableInterest RevenueInterest ReceivableInvestment Income or LossNo Entry
	Investment Income or LossBonds PayableInterest PayableNo EntryCashInterest ReceivableGain on Sale of BondsInterest RevenueInterest ExpenseInvestments at Amortized Cost
	Gain on Sale of BondsCashNo EntryInvestment Income or LossInterest ReceivableInterest PayableInterest RevenueInterest ExpenseBonds PayableInvestments at Amortized Cost
	(To accrue interest revenue.)

(3) The receipt of interest on January 1, 2022. (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 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Bonds PayableNo EntryCashInterest ReceivableInvestments at Amortized CostInvestment Income or LossInterest RevenueInterest ExpenseInterest PayableGain on Sale of Bonds
	Investments at Amortized CostCashInvestment Income or LossNo EntryBonds PayableInterest PayableInterest RevenueInterest ExpenseInterest ReceivableGain on Sale of Bonds
	(Collection of interest receivable.)