Question: Presented below is a partial amortization schedule for Discount Pizza. 1. Record the bond issue assuming the face amount of bonds payable is $70,000. 2.

Presented below is a partial amortization schedule for Discount Pizza.

(1) (2) Cash Paid (3) Interest (4) Increase in (5) Carrying Value Period for Interest Expense Carrying Value $63,948 64,056 64,168 Issue date 1 $2,450 $2,558 $108 112 2 2,450 2,562

1. Record the bond issue assuming the face amount of bonds payable is $70,000.

2. Record the first interest payment.

3. Explain why interest expense increases each period.

(1) (2) Cash Paid (3) Interest (4) Increase in (5) Carrying Value Period for Interest Expense Carrying Value $63,948 64,056 64,168 Issue date 1 $2,450 $2,558 $108 112 2 2,450 2,562

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