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 Interest expense is 6 times the carrying value of $76,860

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

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.

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