EX 11-4 Entries for issuing bonds and amortizing premium by straight-line method Obi. 2 Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1. Smiley issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%, receive ing cash of $20,811,010. Interest is payable semiannually on April 1 and October 1. Journalize the entries to record the following: a. Issuance of bonds on April 1, 20Y1. b. First interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. Explain why the company was able to issue the bonds for $20,811,010 rather than for the face amount of $20,000,000