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>> SHOW ME HOW EX 14-7 Entries for issuing bonds and amortizing premium by straight-line method OBJ. 2, 3 Favreau Corporation wholesales repair products to

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>> SHOW ME HOW EX 14-7 Entries for issuing bonds and amortizing premium by straight-line method OBJ. 2, 3 Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $35,000,000 of five-year, 7% bonds at a market (effec- tive) interest rate of 6%, receiving cash of $36,492,785. Interest is payable semiannually on April 1 and October 1. Journalize the entries to record the following: a. Issuance of bonds on April 1. b. First interest payment on October 1 and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. Round to the nearest dollar Explain why the company was able to issue the bonds for $36,492,785 rather than for the face amount of $35,000,000. C

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