Legacy issues $640,000 of 8.5%, four-year bonds dated January 1, 2016, that pay interest semiannually on June 30 and December 31. They are issued at $570,443 and their market rate is 12% at the issue date.

1. Prepare the January 1, 2016, journal entry to record the bonds' issuance.

4. Prepare the journal entries to record the first two interest payments.

2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare an effective interest amortization table for the bonds' first two years. (Enter all amounts positive values.) Cash Interest Bond Interest Discount Unamortized Interest Carrying Value Paid Amortization Expense Discount Period-End 01/01/2016 06/30/2016 12/31/2016 06/30/2017 12/31/2017