Legacy issues $700,000 of 7.5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $643,419 and their market rate is 10% at the issue date.

1.

Prepare the January 1, 2015, journal entry to record the bonds' issuance.

2.	Determine the total bond interest expense to be recognized over the bonds' life.