Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its focal year, lacinto Company med $17,500,000 of five-year, 5% bands to france t improvement products Interest is payable semiannually. The bonds were issued at a market (effective i receiving cash of $16,044,617. a. Joumalize the entries to record the following: 1. Issuance of the bonds 2. First semiartual interest payment. The bond discount amortization is combined with the 3. Second semiannual interest payment. The bond discount amortization is combined If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. L. CH Disco on Bonds Payable Bonds Payable 16344817 LABURD 2 Cas Expense 300X 111 Bel Town By Mas Bonds Payable is always corded at face value Any difference in sue price is reflected in a premium count account. The shootin provides equal amounts of amortization over the he of the bond b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. c. Why was the company able to issue the bonds for only $16,044,617 rather than for the face amount of $17,500,000? The market rate of interest is the contract rate of interest. Feedback Check My Work Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Jacinto Company issued $17,500,000 of five-year, 5% 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 7%, resulting in Jacinto Company receiving cash of $16,044,617. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. 3. Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. Cash Discount on Bonds Payable Bonds Payable 2. Interest Expense Discount on Bonds Payable Cash 3. Interest Expense Discount on Bonds Payables Cash 16,044,617 1,455,383 V 17,500,000 875,000 X 72,769 X 437,500 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond. b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. rnalize the entries to record the following: uarice of the bonds. st semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. econd semiannual interest payment. The bond discount amortization is combined with the semiannual interest paymer amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. Cash Discount on Bonds Payable Bonds Payable 16,044,617 1,455,383 17,500,000 2. Interest Expense 875,000 X Discount on Bonds Payable 72,769 X Cash 437,500 3. Interest Expense Discount on Bonds Payable Cash Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line m- amortization over the life of the bond. b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. c. Why was the company able to issue the bonds for only $16,044,617 rather than for the face amount of $17,500,0007 The market rate of interest is greater than the contract rate of interest