1.Prepare the January 1, 2013, journal entry to record the bonds' issuance.
Legacy issues $670,000 of 6.0%, four-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. They are issued at $624,896 and their market rate is 8% at the issue date.
Record the issue of bonds with a par value of $670,000 cash on January 1, 2013 at an issue price of $624,896.
Determine the total bond interest expense to be recognized over the bonds' life.
Amount repaid=
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.
Prepare the journal entries to record the first two interest payments.
Record the interest payment and amortization on June 30, 2013.
Record the interest payment and amortization on December 31, 2013.