On the first day of its fiscal year, chin company issued $15,0000 of 5-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin receiving cash of $14,376,255.

Need help journalizing the entries of the record of the following:

1. Issuance of the bonds.
2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment, round to the nearest dollar.
3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment.

B. Determine the amount of the bond interest expense for the first year.

C. Explain why the company could issue the bonds for only $14,376,255 rather than the face amount of $15,000,000.