On January 1, 2016, Masterwear Industries issued $700,000 of 12% bonds, dated January 1. Interest of $42,000 is payable semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 14%. The entire bond issue was purchased by United Intergroup, Inc.

How can I get 666,633 and 33,367. please show calculation and explain it.

Bonds Sold at a Discount (continued) On January 1, 2016, Masterwear Industries issued $700,000 of 12% bonds, dated January 1, Interest of $42,000 is payable semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 14%. The entire bond issue was purchased by United Intergroup, Inc. Journal Entry Debit Credit Masterwear (Issuer) Cash 666,633 Discount on bonds payable (difference) 33,367 Bonds payable (face amount) 700,000 United (Investor) Investment in bonds (face amount) 700,000 Discount on bond investment (difference) Cash (price calculated on slide 13) 33,367 666,633