Required information

[The following information applies to the questions displayed below.]

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.

Required:

1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.

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