On the first day of its fiscal year, Ebert Company issued $17,000,000 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 Company receiving cash of $16,389,017. The company uses the interest method. a. Journalize the entries to record the following: Question Content Area 1. Sale of the bonds. Round amounts to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. blank Cash Cash Cash Discount on Bonds Payable Discount on Bonds Payable Discount on Bonds Payable Bonds Payable Bonds Payable Bonds Payable Question Content Area 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. blank Interest Expense Interest Expense Interest Expense Discount on Bonds Payable Discount on Bonds Payable Discount on Bonds Payable Cash Cash Cash Question Content Area 3. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select - Question Content Area b. Compute the amount of the bond interest expense for the first year. Round amounts to the nearest dollar. Annual interest paid $fill in the blank 5f4cab044073fb6_1 Discount amortized fill in the blank 5f4cab044073fb6_2 Interest expense for first year $fill in the blank 5f4cab044073fb6_3 Question Content Area c. Explain why the company was able to issue the bonds for only $16,389,017 rather than for the face amount of $17,000,000. The bonds sell for less than their face amount because the market rate of interest is the contract rate of interest. Investors willing to pay the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn on similar bonds (market rate). Check My Work2 more Check My Work uses remaining.