On the first day of its fiscal year, Chin Company issued $25,500,000 of five-year, 11% 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 13%, resulting in Chin Company receiving cash of $23,666,949.

3,235,531 2. Interest Expense Discount on Bonds Payable 1,833,031 Cash 1,402,500 Interest Expense 3. 3,235,531 Discount on Bonds Payable 1,833,031 x Cash 1,402,500 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in amortization provides equal amounts of amortization over the life of the bond. b. Determine the amount of the bond interest expense for the first year