Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid annually on December 31.

1. & 2.

Record the bond issue and first interest payment on December 31, 2015.

Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $64,008 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid annually on December 31.

1. & 2.

Record the bond issue and first interest payment on December 31, 2015.

On January 1, 2015, Lizzy's Lemonade issues 5%, 20-year bonds with a face amount of $100,000 for $88,443, priced to yield 6%. Interest is paid semiannually.

What amount of interest expense will be recorded on June 30, 2015, the first interest payment date?

Presented below is a partial amortization schedule for Discount Pizza.

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

1. & 2.

Record the bond issue and first interest payment.