Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Jacinto Company issued $29,000,000 of five-year, 9% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 10%, resulting in Jacinto Company receiving cash of $27,880,248. 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. 3. Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. Cash 1. 27,880,248 Discount on Bonds Payable 1,119,752 Bonds Payable 29,000,000 Interest Expense 2. 1,180,813 X Discount on Bonds Payable 93,313 Cash 1,087,500 3. Interest Expense 1,180,813 X Discount on Bonds Payable 93,313 Cash 1,087,500 x 3. Interest Expense 1,180,813 Discount on Bonds Payable 93,313 Cash 1,087,500 X Feedback 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 amortization provides equal amounts of amortization over the life of the bond. b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. c. Why was the company able to issue the bonds for only $27,880,248 rather than for the face amount of $29,000,000? The market rate of interest is the contract rate of interest. Feedback Check My Work Add total interest expense for the year