Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $18,800,000 of 5 -year, 4% 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 5%, resulting in Chin receiving cash of $17,977,335. 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. T Check My Won 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 firs year: x c. Why was the company able to issue the bonds for only $17,977,335 rather than for the face amount of $18,800,000 ? The market rate of interest is the contract rate of interest. Therefore, inventors pay the full face amount of the bonds