Entries for Issuing Bonds and Amortizing Discount by Straight Line Method On the first day of its fiscal year, Jacinto Company issued $14,400,000 of five year, 7 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 Jacinto Company receiving cash of $13,815,958 Question Content Area a Journalize the entries to record the following Issuance of the bonds First semiannual interest payment The bond discount amortization is combined with the semiannual interest payment 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 Accounts PayableBonds PayableCashInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select 2 Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableCashInterest ExpenseInterest Payable Select Select 3 Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable Select Select Accounts PayableBonds PayableCashInterest ExpenseInterest Payable Select Select Question Content Area b Determine the amount of the bond interest expense for the first year Round your answer to the nearest dollar $fill in the blank 842c0604cfe1f9f 1 c Why was the company able to issue the bonds for only $13,815,958 rather than for the face amount of $14,400,000 The market rate of interest is greater than less than the contract rate of interest

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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Jacinto Company issued $14,400,000 of five-year, 7%

Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method

On the first day of its fiscal year, Jacinto Company issued $14,400,000 of five-year, 7% 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 Jacinto Company receiving cash of $13,815,958.

Question Content Area

a. Journalize the entries to record the following:

Issuance of the bonds.
First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment.
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.	Accounts PayableBonds PayableCashInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
2.	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest ExpenseInterest Payable	- Select -	- Select -
3.	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest Payable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest ExpenseInterest Payable	- Select -	- Select -

Question Content Area

b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. $fill in the blank 842c0604cfe1f9f_1

c. Why was the company able to issue the bonds for only $13,815,958 rather than for the face amount of $14,400,000? The market rate of interest is

greater than less than

the contract rate of interest.