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Entries for Issuing Bonds Abioye Co. produces and distributes semiconductors for use by computer manufacturers. Abioye Co. is5ued $900,000 of 15 -year, 10% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1 . The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec, 31 Recorded accrued interest for two months. Joumalize the entries to record the above selected transactions for the current year. If an amount box does not require an entry, leave it blank. Round your answers to whole number. Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $9,000,000 of 4 -year, 7% bonds at a market (effective) interest rate of 4%, receiving cash of $9,988,939. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the 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. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $9,988,939 rather than for the face amount of $9,000,000 ? The market rate of interest is the contract rate of interest

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