On the first day of its fiscal year, Ebert Company issued $23,000,000 of 5-year, 12% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 13%, resulting in Ebert receiving cash of $22,173,375. The company uses the interest method.

Journalize the entries to record the following:

Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Cash	22173375
Discount on Bonds Payable	826625
Bonds Payable		23000000

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.

Interest Expense
Discount on Bonds Payable
Cash

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.

Interest Expense
Discount on Bonds Payable
Cash

Compute the amount of the bond interest expense for the first year. Round to the nearest dollar.

Annual interest paid $____________

Discount amortized ____________

Interest expenses for first year $____________