Entries for Issuing Bonds and Amortizing Discount by Straight-Line MethodOn 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 Company receiving cash of $9,594,415.a. Journalize the entries to record the following:Issuance of the bonds.First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.1. Cash Discount on Bonds Payable Bonds Payable 2. Interest Expense Discount on Bonds Payable Cash 3. Interest Expense Discount on Bonds Payable Cash FeedbackBonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond.b. Determine the amount of the bond interest expense for the first year.$c. Why was the company able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000.?The market rate of interest is the contract rate of interest.FeedbackBonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond.