Legacy issues $640,000 of 8.5%, four-year bonds dated January 1, 2017, 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.

Record the issue of bonds with a par value of $640,000 cash on January 1, 2017 at an issue price of $570,443.

Date	General Journal	Debit	Credit
Jan 01, 2017

Determine 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

Prepare a straight-line amortization table for the bonds' first two years.

Semiannual Period-End	Unamortized Discount	Carrying Value
01/01/2017
06/30/2017
12/31/2017
06/30/2018
12/31/2018

Record the interest payment and amortization on June 30, 2017.

Date	General Journal	Debit	Credit
Jun 30, 2017

Record the interest payment and amortization on December 31, 2017.

Date	General Journal	Debit	Credit
Dec 31, 2017