Entries for issuing bonds and amortizing discount by straight line method On the first day of its fiscal year, Chin Company issued $15,000,000 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 7 , resulting in Chin receiving cash of $14,376,255 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 1 Accounts PayableBonds PayableCashInterest ExpensePremium on Bonds PayableCash Cash Cash Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpensePremium on Bonds PayableDiscount on Bonds Payable Discount on Bonds Payable Discount on Bonds Payable Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpensePremium on Bonds PayableBonds Payable Bonds Payable Bonds Payable 2 Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Expense Interest Expense Interest Expense Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableDiscount on Bonds Payable Discount on Bonds Payable Discount on Bonds Payable Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash Cash Cash 3 Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Expense Interest Expense Interest Expense Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableDiscount on Bonds Payable Discount on Bonds Payable Discount on Bonds Payable Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash Cash Cash b Determine the amount of the bond interest expense for the first year $fill in the blank 6a459f043fb604f 1 c Why was the company able to issue the bonds for only $14,376,255 rather than for the face amount of $15,000,000 The market rate of interest is greater than less than greater than the contract rate of interest Therefore, inventors are are not are not willing to pay the full face amount of the bonds

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Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $15,000,000 of 5-year, 6%

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

On the first day of its fiscal year, Chin Company issued $15,000,000 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 7%, resulting in Chin receiving cash of $14,376,255.

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.

1.	Accounts PayableBonds PayableCashInterest ExpensePremium on Bonds PayableCash	Cash	Cash
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpensePremium on Bonds PayableDiscount on Bonds Payable	Discount on Bonds Payable	Discount on Bonds Payable
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpensePremium on Bonds PayableBonds Payable	Bonds Payable	Bonds Payable
2.	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Expense	Interest Expense	Interest Expense
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableDiscount on Bonds Payable	Discount on Bonds Payable	Discount on Bonds Payable
	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash
3.	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Expense	Interest Expense	Interest Expense
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableDiscount on Bonds Payable	Discount on Bonds Payable	Discount on Bonds Payable
	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash