Yang Corporation wholesales repair products to equipment manufacturers. On May 1, 2014, Yang Corporation issued $20,000,000 of 10-year, 9% bonds at a market (effective) interest rate of 7%, receiving cash of $22,842,560. Interest is payable semiannually on May 1 and November 1. Journalize the entries to record the following: a. Issuance of bonds on May 1, 2014. b. First interest payment on November 1, 2014, and amortization of bond premium for six months, using the straight-line method. (Round to the nearest dollar.) c. Explain why the company was able to issue the bonds for $22,842,560 rather than for the face amount of $20,000,000.
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