A)

B)

Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $10 300,000 of five year, 10% bonds to finance its operations or producing and seling home improvement products. interest is payable semiannually. The bonds were issued at a manet (effective) interest rate of 12%, resulting in Chin receiving cash a, ss, 54,861. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar Cash Discount on Sonds Payable 4 Bonds Payable Interest Expense Diecount on Bends Payable y Cash . Interest Expense Discount on Bonds Payable Cash Cash Foodback Check My Wok Bonds Payable is always recorded at face value Any diference in issue amortization over the ife of the bond. price is reflected in a premium or discount account. The straight-ine method of amortization provides equal amounts of Leaning Objective 2 b. Determine the amount of the bond interest expense for the first year y abie to issue the bonds for only $9,341,063 rather than for the face ameunt of $10,300,0007 willing to pay the full face amount of the bonds The market rate of interest is greater thant the contract rate of interest. Therefore, inventors are net