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

On the first day of its fiscal year, Chin Company issued $$12,000,000$ of $5-$year, $9\%$ bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market $($effective$)$ interest rate of $11\%,$ resulting in Chin receiving cash of $$11,095,480.$

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

$1.$ Issuance of the bonds.

$2.$ First semiannual interest payment. The bond discount is combined with the semiannual interest payment. $($Round your answer to the nearest dollar.$)$

$3.$ 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.

$1.$

$11,095,480$

$904,520$

Discount on Bonds Payable

Bonds Payable

$$ V

$2.$ Interest Expense

Discount on Bonds Payable

Cash

$3.$ Interest Expense

Discount on Bonds Payable