Entries for Issuing Bonds and Amortizing Discount by Straight$-$Line Method

On the first day of its fiscal year, Chin Company issued $$25,800,000$ of five$-$year, $10\%$ bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market $($effective$)$ interest rate of $12\%,$ resulting in Chin receiving cash of $$23,900,978.$

Question Content Area

a$.$ Journalize the entries to record the following:

Issuance of the bonds.

First semiannual interest payment. The bond discount is combined with the semiannual interest payment. $($Round your answer to the nearest dollar.$)$

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.

$1.$

$2.$

$3.$

Feedback Area