itries for Issuing Bonds and Amortizing Premium by Straight-Line Method dvreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued \$6,200,000 6-year, 6% bonds at a market (effective) interest rate of 3%, receiving cash of $7,214,397, interest is payoble semiannually on April 1 nd Oetober 1. Journalize the entry to record the issuance of bonds on April 2. If an amount box does not require on entry, leave it blank. Fectosis Frineck My Work Bonds Payable is ahays recorded at face value. Any difference in issue price is refiected in a premium or discount account. The straight-line method of smortization provides equal amounts of amortization over the life of the bond. b. Joumalize the entry to record the first interest poyment on Qctobar 1 and amortization of bond premlum for six months, using the straight-line method. The bond premlum amortizotion is cornbined with the semiannual interest payment. Round to the near est dollar. If an omount box does not reculre an entry, leave it blank, 0. Journalize the entry to record the first interest payment on October 1 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. if amount box does not require an entry, leave it blank. Ferdtanck Fheck my Work The straight-line method of amortization provides equal amounts of amortization over the life of the bond. c. Why was the compeny able to issue the bondsfor 57,224,397 rather than for the face amount of 56,200,000 ? The market rate of interest is the contract rate of interest