Amortize Promium by Interest Methad Shunda Corporation wholesales parts to appliance manufacturers, On January 1, Year 1, 5hunda Corporation issued $22,000,000 of five-year, 9% bonds at a market (effective) interest rate of 7%, receiving cash of $23,429,684, thterest is payable semiannualiy. shunda Corporation's fiscal year begins on lanuary 1 . The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round amounts to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. 2. First semiannual interest payment, including amortication of premium. Round to the nearest dollar. For a compound transaction, it an amount box does not require an entry, leave it blanki 3. Second semiannual interest payment, including amortization of premlum. Round to the nearest dollar. For a compound transaction, if an amount box does not reeuire an entry, leave it biank. 3. Second semiannual interest payment, including amortization of premium. Round to the nearest dollar. For a compound transaction, if an amount box does not require an 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. c. Explain why the company was able to issue the bonds for $23,829,684 rather than for the face amount of $22,000,000. The bonds sell for more than their face amount because the market rate of interest is the contract rate of interest. Investors willing to pay more for bonds that pay a higher rate of interest (contract rate) than the rate they could earn on simillar bonds (market rate)