Legacy issues $570,000 of 8.5%, four-year bonds dated january 1, 2019, that pay interest semiannually on june 30 and december 31. they are issued at $508,050 when the market rate is 12%.

journal entry  based on straight line method are given below

Explanation:

given data

issues = $570,000

rate = 8.5 %

time = 4 year

issued = $508,050

market rate = 12%

to find out

prepare journal entry

solution

journal entry  based on straight line method

date                    general journal                              Debit             Credit  

June 30               bond interest expenses                $31969  

                            Discount on Bonds payable                                $7744

                             = (570000-508050 ) ÷ 8

                              Cash = 570000 × 8.5% ÷ 2                                $24225

December 31       Bond interest expense                  $31969  

                            Discount on Bonds payable                                $7744

                             = (570000-508050 ) ÷ 8

                              Cash = 570000 × 8.5% ÷ 2                                $24225