On the first day of its fiscal year, Ebert Company issued $26,000,000 of 5-year, 9% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ebert Company receiving cash of $24,040,207. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round amounts to the nearest dollar. If an amount box does not require an entry, leave it blank. 2. First semiannual interest payment, including amortization of discount Round to the nearest dollar. If an amount box does not require an entry leave it blank 3. Second semiannual interest payment including amortization of discount. Round to the nearest dollar. If an amount or does not recta entry leave it blank 10 3. Second semiannual Interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. E b. Compute the amount of the bond interest expense for the first year. Round amounts to the nearest dollar. Annual Interest pald Discount amortized Interest expense for first year si c. Explain why the company was able to issue the bonds for only $24,040,20% rather than for the face amount of $26.000.000, The bonds sell for less than their face amount because the market rate of Interestis the contract rate of interest Investors willing to pay the full face amount for bonds that pay a lower contractate of interest than the race they could com os bonds market rate)