Pretzelmania, Inc , issues 7 , 15 year bonds with a face amount of $70,000 for $76,860 on January 1, 2015 The market interest rate for bonds of similar risk and maturity is 6 Interest is paid annually on December 31 1 Record the bond issue 2 Record the first interest payment on December 31, 2015 In...

1 January 1 2015 Cash 76860 Bonds Paya ...

Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1,

Question:

Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1, 2015. The market interest rate for bonds of similar risk and is 6%. Interest is paid annually on December 31.
1. Record the bond issue.
2. Record the first interest payment on December 31, 2015. Interest expense is 6% times the carrying value of $76,860.

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...