Amortize Premium by Interest Method Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Shunda issued $22,000,000 of five-year, 9% bonds at a market (effective) interest rate of receiving cash at $23,829,684. Interest is payable semiannually. Shunda fiscal year begins on January 1. The company uses the Interest method a Joumalize the entries to record the following 1. Sale at the bonds. Round amaunts to the nearest dollar. For a compound transaction, it an amount box does not require an entry, terve it blank 2. First semiannual interest payment, including amortization of premium. Round to the nearest dollar. For a compound transaction, if an amount box does not requirean try, leave it blank Second semiannual interest payment, including amortuation of premium Round to the nearest doll for a comand transaction, an amount box does not require entry leave it blank b. Determine the bond Interest expense for the first year. Enter amounts as positive numbers. Round amounts to the nearest dollar. Annud interest paid Less premium amortired Interest expense for first year Explain why the company was able to issue the bonds for 523,829.684 rather than for the face amount of $22,000,000 The bonds sell for more than their face amount because the market rate of interestis the contract rate of interest investas willing to pay more for bonds that pay a higher rate of interest (contract rate) than the rate they could earn on similar bonds market rate)