Amortize discount by Interest method restruction Chart of Accounts Journal Additional Question Final Question Instructions On the first day of its fiscal year, Ebert Company issued $60,000,000 of 10-year, 7% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective interest rate of 9%, resulting in Ebert receiving cash of $43,495,895. The company uses the interest method. Required: a. Journalize the entries to record the following transactions. Refer to the Chart of Accounts for exact wording of account titles 1. Sale of the bonds on Janu1. 2. First semiannual interest payment on June 30, including amortization of discount Round to the nearest dollar 3. Second semiannual interest payment on December 31, including amortization of discount Hound to the nearest dollar b. Compute the amount of the band interest expense for the first year c. Explain why the company was able to issue the bands for only $43,495,895 rather than for the face amount of $50,000,000 Chart of Accounts Journal Additional Question Final Question Instructions Journal JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POSTREK DENT CREDIT ASSETS LIABILITIES EQUITY 1 5 4 Instructions Chart of Accounts Journal Additional Question Final Question Additional Question b. Compute the amount of the bond Interest expense for the first year. Enter amount as a positive number Annual interest paid $ Discount amortized Interest expense for first year CengageNOWV2 Online te Book Amortize discount by Interest method Instructions Chart of Accounts Journal Additional Question Final Question Final Question c. Explain why the company was able to issue the bonds for only $43,495,895 rather than for the face amount of $50,000,000, The bonds sell for less than their face amount because the market rate of interest is rate of interest. Investors the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn on similar bonds market rate)