Presented below is a partial amortization schedule for Premium Pizza.

(1)		(2)				(3)				(4)				(5)
Period		Cash Paid for Interest				Interest Expense				Decrease in Carrying Value				Carrying Value
Issue date														$	60,249
1		$	1,325			$	1,205			$	120				60,129
2			1,325				1,203				122				60,007

Required:

1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $53,000. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

1) record the issuance of bond

2) record the first interest payment

3. Interest expense decreases each period because the carrying value of the debt issued at a premium decreases over time.

multiple choice

• True

• False