X EX 11-3 Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% 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 8%, resulting in Chin receiving cash of $9,594,415. a. Journalize the entries to record the following: Obj. 2 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. b. Determine the amount of the bond interest expense for the first year. Explain why the company was able to issue the bonds for only $9,594,415 rather C. than for the face amount of $10,000,000.

X EX 11-3 Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% 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 8%, resulting in Chin receiving cash of $9,594,415. a. Journalize the entries to record the following: Obj. 2 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. b. Determine the amount of the bond interest expense for the first year. Explain why the company was able to issue the bonds for only $9,594,415 rather C. than for the face amount of $10,000,000.

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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