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pls answer 2 On the first day of its fiscal year, Chin Company issued $26,500,000 of five-year, 12% bonds to finance its operations of producing
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On the first day of its fiscal year, Chin Company issued $26,500,000 of five-year, 12% bonds to finance its operations of producing and seiling homet improvement prodocts. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 134, resulting in Chin receiving cash of s25,547,Se5. a. Joumakze the entries to record the following: 1. issuance of the bonds, 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest doliar.) 3. Second semiannual interest payment. The bond discoant is combined with the semiannual internst payment. (d your answer to the nearest doliaf.) If an amount box does not require an entry, leave it blank. b. Determine the amount of the bond interest expense for the fint year: c. Why was the company abie to issue the bonds for only $25,547,545 rather than for the face armourt of $26,500.000? The market rate of internst is the contract rate of interst. Therefore. INventars Step by Step Solution
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