Legacy issues $660,000 of 5.5%, four-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. They are issued at $648,412 and their market rate is 6% at the issue date.

1.

Prepare the January 1, 2013, journal entry to record the bonds' issuance. (Record the issue of bonds with a par value of $660,000 cash on January 1, 2013 at an issue price of $648,412.)

2.

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

Semiannual Period End	Unamortized Discount	Carrying Value
1/1/13
6/30/13
12/31/13
6/30/14
12/31/14

3.	Prepare the journal entries to record the first two interest payments. (6/30/2013 & 12/31/2013)