Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Povreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $2,000,000 ot 6-year, bonds at a market (effective interest rate of receiving cash of $2,317,259. Interest is payable semiannually on April 1 and October 1. Joumaise the entry to record the issuance of hands on April 1. If an amount box does not require an entry, leave it blank Cash 2.317,19 Premium on Bonds Payable Bands Payable v 2.000.000 Bonde Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight toe method of amortization provides equal amounts of amortization over the life of the bond, b. Journalise the entry to record the first interest payment on October 1 and amortization of bond premium for sx months, using the straight line method. The hond premium amortization is combined with the semiannual interest payment. Round to the nearest dollar. If an amount box does not require an entry, leave it blank Interest Expense Premium on Bands Payable Cash Deck My Work Previous Next