Business, 29.06.2021 16:20 briannabo08

Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $1,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 6%, receiving cash of $1,449,138. Interest is payable semiannually on April 1 and October 1. Required:
A. Journalize the entries to record the following. Refer to the Chart of Accounts for exact wording of account titles.
1.Issuance of bonds on April 1.
2.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.)
B. Explain why the company was able to issue the bonds for $20,811,010 rather than for the face amount of $20,000,000.

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Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley i...

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