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

On the first day of its fiscal year, Chin Company issued $$16,800,000$ of $5-$year, $6\%$ 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 $8\%,$ resulting in Chin receiving cash of $$15,437,302.$

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 $$15,437,302$ rather than for the face amount of $$16,800,000?$

The market rate of interest is

the contract rate of interest. Therefore, inventors

willing to pay the full face amount of the bonds.