Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $2,500,000 of 8 -year, 7% bonds at a market (effective) interest rate of 6%, receiving cash of $2,657,013. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1. If an amount box does not require an entry, leave it blank. Feedback Check My Work 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. c. Why was the company able to issue the bonds for $2,657,013 rather than for the face amount of $2,500,000 ? The market rate of interest is the contract rate of interest. Rushton Corp., a wholesaler of music equipment, issued $6,030,000 of 15 -year, 12% callable bonds on March 1,20Y1, at their face amount, with interest payable on March 1 a September 1 . The fiscal year of the company is the calendar year. 20Y1 Mar. 1 Issued the bonds for cash at their face amount. Sept. 1 Paid the interest on the bonds. 20Y5 Sept. 1 Called the bond issue at 103 , the rate provided in the bond indenture. (Omit entry for payment of interest.) Journalize the entries to record the above selected transactions. Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank. 20 Y1 Mar. 1 Paid the interest on the bonds. If an amount box does not require an entry, leave it blank. 20Y1 Sept. 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.) If an amount box does not require an entry, leave it blank. 20Y5 Sept. 1 Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $348,000 of 20 -year, 14% callable bonds on May 1,20Y1, at their face amount, with interest payable on May 1 and November 1 . The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions: 20Y1 May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. 20Y5 Nov. 1 Called the bond issue at 97 , the rate provided in the bond indenture. (Omit entry for payment of interest.) Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank. 20Y1, May 1 Paid the interest on the bonds. If an amount box does not require an entry, leave it blank. 20Y1, Nov. 1 Called the bond issue at 97 , the rate provided in the bond indenture. (Omit entry for payment of interest.) If an amount box does not require an entry, leave it blank. 20Y5, Nov. 1