tries for Issuing Bonds and Amortizing Discount by Straight Line Method the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds effective) interest rate of 8%, resulting in Chin receiving cash of $9,594,415. Journalize the entries to record the following: 1. Issuance of the bonds. 2. Fint semiannual interest payment. The bond discount is 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 nearest dollar) If an amount box does not require an entry, leave it blank 1. Ch Discount on Bonds Payables Bonds Payable 9594415 405585 10.000.000 2. Interest Expense Discount on Bondi Payable 35000X 35,000 350.000 3. Interest Expense 385.128 X Discount on Bonds Payable 35.428 X 350.000 Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-ane method of amortization provides equal amounts of amortization over the i b. Determine the amount of the bond interest expense for the first year 768,905 x c. Why was the company able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000 The market rate of interest is greater then the contract rate of interest. Therefore, inventors are not willing to pay the full face amount of the bonh