Chapter 14 Long-Term Liabilities: Bonds and Notes 707 EX 14-6 Entries for issuing bonds and amortizing discount by straight On the first day of its fiscal year, Chin Company issued nds and amortizing discount by straight-line method OBJ. 2, 3 its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home im operations of producing and selling home improvement products. Interest nnually. The bonds were issued at a market (effective interest rate of 8%, resulting in Chin Company receiving cash of $9,594,415. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. Round your answer to the nearest dollar. 3. Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. Round your answer to the nearest dollar. b. Determine the amount of the bond interest expense for the first year. c. Explain why the company was able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000. Dearesi -346 whose fiscal years A ed July 1, Year 1, 267. Interest is paykle ment note to Nicks Bee he first payment counting 3 PR 14-4A Entries for bonds payable and installment note transaction The following transactions were completed by Winklevoss Inc., whos calendar year: Year 1 July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July market (effective) rate of 13%, receiving cash of $63,532,267.1 semiannually on December 31 and June 30. Oct. 1. Borrowed $200,000 by issuing a six-year, 6% installment note to The note requires annual payments of $40,673, with the first payn on September 30, Year 2. Dec. 31. Accrued $3,000 of interest on the installment note. The interest is the date of the next installment note payment. 31. Paid the semiannual interest on the bonds. The bond discount amortis $261,693 is combined with the semiannual interest payment. Year 2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization $261,693 is combined with the semiannual interest payment. Sept. 30. Paid the annual payment on the note, which consisted of interest of $12.00 and principal of $28,673. Dec. 31. Accrued $2,570 of interest on the installment note. The interest is payable the date of the next installment note payment. 31. Paid the semiannual interest on the bonds. The bond discount amortization $261,693 is combined with the semiannual interest payment