If interest is not paid in the first month of bond issuance then why is june 30th interest payment calculated at (12% x 6/12 X 739,814,813?). Even though it says interest is paid semiannually, the period from bond inception to june is only 5 months when not counting the month the bond was issued (January).

| Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on January 1, 2018. The bonds sold for . $739,814,813 and mature on December 31, 2037 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is pald semlannually on June 30 and December 31. Requlred 1. to 3. Prepare the journal entry to record thelr Issuance by Federal on January 1, 2018, Interest on June 30, 2018 (at the effective rate) and Interest on December 31, 2018 (at the effective rate). 4. At what amount will Federal report the bonds among its llablities In the December 31, 2018, balance sheet? Complete this question by entering your answers in the tabs below Show less Req 1 to 3 Req 4 Prepare the journal entry to record their issuance by Federal on January 1, 2018, interest on June 30, 2018 (at the effective rate) and interest on December 31, 2018 (at the effective rate). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) Date General Journal Debit Credit January 01 2018 Cash 739,814,813 Discount on bonds payable 60,185,187 Bonds payable 800,000,000 June 30, 2018 Interest 44,388.89 388.889 44,000,000 Discount on bonds payable Cash