Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers Corporation issued $27,700,000 of 10-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of $31,303,125. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries with a compound transaction, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. Cash Premium on Bonds Payable Bonds Payable 31,303,125 3,603,125 27,700,000 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account The straight-line method of amortization provides equal amounts of amortization over the life of the bond. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. Interest Expense Premium on Bonds Payable Cash 88