Entries for Issuing Donds and Amortizing Premnim by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 2011, Smiley issued $4,800,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $5,398,166. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 3, 2011. If an amount box does not require an entry, leave it blank b. Journalze the entry to record the first interest payment on October 1, 2011, and amortization of bond premium for six months, using the straight line method. Hound to the nearest dollar. If an amount box does not require an entry, leave it blank. DO c. Why was the company able to issue the bonds for $5,398,186 rather than for the face amount of $4,800,000? The market rate of interest is the contract rate of interest.