Entries for issuing bonds and amortizing discount by straight$-$line method

On the first day of its fiscal year, Chin Company issued $$14,700,000$ of $5-$year, $12\%$ 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 $13\%,$ resulting in

Chin receiving cash of $$14,171,679.$

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.

b$.$ Determine the amount of the bond interest expense for the first year.

$

c$.$ Why was the company able to issue the bonds for only $$14,171,679$ rather than for the face amount of $$14,700,000?$

The market rate of interest is

the contract rate of interest. Therefore, inventors

the full face amount of the bonds.