on January 1, the frat day of its fiscal

ournal Final day of its fiscal year, Chin Company issued $23,100,000 of five-year, 9% bonds to finance its operations of producing and home improvement products. Interest is payable semiannually. The bonds were issued at a market effective) interest rate of 10%, resulting in Chin Company receiving cash of $22,208,059. Required: A. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second l interest payment. The bond discount amortization, using the straight-ine method, is combined with the semiannual interest payment. (Round your answer to the nearest dolar.) B. Determine the amount of the bond interest expense for the first year. C. Explain why the company was able to issue the bonds for only $22,208,059 rather than for the face amount of $23,100,000. Previous Next