Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June

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Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%.


Required

1. Prepare the January 1 journal entry to record the bonds’ issuance.

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

3. Prepare a straight-line amortization table like the one in Exhibit 10.7 for the bonds’ first two years.

4. Prepare the journal entries to record the first two interest payments.

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