Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $1,300,000 of 8-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $1,378,614. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave it blank. Cash 1,378,614 Premium on Bonds Payable 78,614 x Bonds Payable 1,300,000 Feedback b. Journalize the entry to record the first interest payment on October 1, 2016, and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Interest Expense 12,693 X Premium on Bonds Payable 39,307 X Cash 52,000