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Assignment 1-Hor Entries for issuing Bonds and Amortizing Oscount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $27,400,000 of five year, 12% bonds to finance its operations of producing and selling home improvement products. Interestis payable semiannually. The bonds were issued at a market (effective interest rate of 14%, resulting in Chin receiving cash of $25,475,556. a Joumalize the entries to record the following: 1 Issuance of the bonds 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dolar) If an amount box does not require an entry leave it blank: 1. Cash 25.475.556 Discount on fonds Payable 1.8204 Bonds Payable 27400.000 1440 x 1622X 2. Interest Expense Discount on Bonds Payable Cash 1.666000 3. Interest Espense Discount on Monds Payable Cash b. Determine the amount of the bond interest expense for the first year. c. Why was the company able to issue the bonds for only $25.475,556 rather than for the face amount of $27.400,000 The market rate of interestis the contract rate of interest. Therefore, inventor willing to pay the face amount of the bonds