Legacy issues $640,000 8 5 four year bonds dated January 1, 2017, which pay interest semiannually on June 30 and December 31 They are issued for $570,443 and their market rate is 12 on the issuance date Record the $640,000 par value bond issue in cash on January 1, 2017 at an issue price of $570,443 Date General diary Debit Credit January 1, 2017 Determine the total interest expense of the bonds that will be recognized over the life of the bonds Total bond interest expense over the life of the bonds Reimbursed amount payments of face value at maturity Total refunded Less amount borrowed Total bond interest expense Prepare a straight line amortization table for the first two years of the bonds Semester End Period discount not amortized Value in books 01 01 2017 30 06 2017 31 12 2017 30 06 2018 31 12 2018 Record the interest payment and amortization on June 30, 2017 Date General diary Debit Credit June 30, 2017 Record interest payment and amortization as of December 31, 2017 Date General diary Debit Credit December 31, 2017

Question: Legacy issues $640,000 8.5% four-year bonds dated January 1, 2017, which pay interest semiannually on June 30 and December 31. They are issued for $570,443

Legacy issues $640,000 8.5% four-year bonds dated January 1, 2017, which pay interest semiannually on June 30 and December 31. They are issued for $570,443 and their market rate is 12% on the issuance date.

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

Date	General diary	Debit	Credit
January 1, 2017

Determine the total interest expense of the bonds that will be recognized over the life of the bonds.

Total bond interest expense over the life of the bonds:
Reimbursed amount:
	payments of
face value at maturity
Total refunded
Less amount borrowed
Total bond interest expense

Prepare a straight-line amortization table for the first two years of the bonds.

Semester-End Period	discount not amortized	Value in books
01/01/2017
30/06/2017
31/12/2017
30/06/2018
31/12/2018

Record the interest payment and amortization on June 30, 2017.

Date	General diary	Debit	Credit
June 30, 2017

Record interest payment and amortization as of December 31, 2017.

Date	General diary	Debit	Credit
December 31, 2017

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