Sheridan Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheridan Corp. has issued $13,500$ units. Each unit consists of a $$840$ par value, $12\%$ subordinated debenture and $14$ shares of $$7$ par common stock. The units were sold to outside investors for cash at $$1,188$ per unit. Prior to this sale, the $2-$week ask price of common stock was $$40$ per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value.

$($a$)$ Prepare the journal entry to record Sheridan's transaction, under the following conditions. $($List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to $0$ decimal places, e$.$g$.38,487.$ 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.$)$

Employing the incremental method.

Employing the proportional method, assuming the recent price quote on the common stock reflects fair value.

No$.$ Account Titles and Explanation

Debit

Credit

$1.$