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