Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $16,500,000 of five-year, 10% 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 12%, resulting in Chin Company receiving cash of $15,285,509. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.
| No. | Account titles and explanation | Debit | Credit |
| a) | Cash | $15285509 | |
| Discount on bonds payable (16500000 -15285509) | $1214491 | ||
| Bonds payable | $16500000 | ||
| (To record issuance of bonds) | |||
| b) | Interest expense (825000+121449) | $946449 | |
| Discount on bonds payable (1214491/10) | $121449 | ||
| Cash (16500000*10%*6/12) | $825000 | ||
| (To record discount amortized and interest paid) | |||
| c) | Interest expense (825000+121449) | $946449 | |
| Discount on bonds payable (1214491/10) | $121449 | ||
| Cash (16500000*10%*6/12 | $825000 | ||
| (To record discount amortized and interest paid) | |||
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