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 $10,725,631 rather than for the face amount of $11,600,0007The market rate of interest isthe contract rate of interest. Therefore, inventorswilling to pay the full face amount of the bonds Entries for issuing bonds and amortizing discount by straight-line methodOn the first day of its fiscal year, Chin Company issued $11,600,000 of 5-year, 9% 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 11%, resulting in Chin receiving cash of $10,725,631.a. Journalize the entries to record the following:1. Issuance of the bonds.2. First semiannual interest payment. The band discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)3. Second semiannual interest payment. The band discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)If an amount box does not require an entry, leave it blank1.3.M

Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $11,600,000 of 5-year, 9% bonds to finance its operations of producing and selling home improvement products. Inte is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin receiving cash of $10,725,631. a. Journalize 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 band discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank 13

Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $11,600,000 of 5-year, 9% bonds to finance its operations of producing and selling home improvement products. Inte is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin receiving cash of $10,725,631. a. Journalize 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 band discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank 13

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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