The for Issung Bonds and Amorting Discount by Straight Line Method On the rest day of its focal year, Chin Company issued $10,000,000 of five year, 7% bonds to finance its operations of producing and selling home improvement products Interest s payable semnunually. The bonds were sted at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $9,594,415 Journal the entries to record the following 1. Isance of the bonds 2. hrst seancal interest payment. The band discount in combined with the semiannual interest payment. (Round your answer to the nearest dollar) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment (Round your answer to the newest dollar) For compound transaction, Wan wount box does not require an entry, leave it blank. Round your answers to the nearest dolor. Cash 9.594,415 Discount on Bonds Payable 405.585 Honds Payable 10,000,000 2 390,558 X Interest Expense Discount on Bonds Payable 350,000 X Cash 40,558 X 3. Interest Expense 390.558 x Discount on Bonds Payable 350.000 X Cash 40.558 X b. Determine the amount of the bond interest expense for the first year 3,905,585 X Why was the company able to issue the bonds for only 59,594,415 rather than for the face amount of $10,000,000? The market rate of interest greater than the contract rate of interest Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight line method of amorturation provides equal amounts of amortization over the life of the bond, Learning Objective 2. My Wor Partly correct