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

On the first day of its fiscal year, Chin Company issued $$18,600,000$ of $5-$year, $12\%$ bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market $($effective$)$ interest rate of $14\%,$ resulting in Chin receiving cash of $$17,293,625.$

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.

EntriesAccountDebitCredit

$1.$

Cash

Cash

$17,293,625$

Cash

Discount on Bonds Payable

Discount on Bonds Payable

$1,306,375$

Discount on Bonds Payable

Bonds Payable

Bonds Payable

Bonds Payable

$18,600,000$

$2.$

Interest Expense

Interest Expense

Interest Expense

Discount on Bonds Payable

Discount on Bonds Payable

Discount on Bonds Payable

Cash

Cash

Cash

$3.$

Interest Expense

Interest Expense

Interest Expense

Discount on Bonds Payable

Discount on Bonds Payable

Discount on Bonds Payable

Cash

Cash