Amortize discount by Interest method $11\%,$ resulting in Ebert receiving cash of $$24,040,207.$ The company uses the interest method.

a$.$ Journalize the entries to record the following:

Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

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First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Interest Expense $$

$\frac{\text{D}\text{i}\text{s}\text{c}\text{o}\text{u}\text{n}\text{t}on\text{B}\text{o}\text{n}\text{d}\text{s}\text{P}\text{a}\text{y}\text{a}\text{b}\text{l}\text{e}}{}$

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Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave It blank.

Discount on Bonds Payable $$

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As the discount or premlum is amortized, the carrying amount of the bond changes. As a result, interest expense also changes each period.

b$.$ Compute the amount of the bond interest expense for the first year. Round to the nearest dollar.

Annual interest paid

Discount amortized

Interest expense for first year

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c$.$ Explain why the company was able to issue the bonds for only $$24,040,207$ rather than for the face amount of $$26,000,000.$ that pay a lower contract rate of interest than the rate they could earn on similar bonds $($market rate$).$

Amortize discount by interest method $11\%,$ resulting in Ebert recelving cash of $$24,040,207.$ The company uses the interest method.

a$.$ Journalize the entries to record the following:

Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

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First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

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FChocithy Work