Pretzelmania, Incorporated, issues $6\%,10-$year bonds with a face amount of $$66,000$ for $$71,144$ on January $1,2024.$The market interest rate for bonds of similar risk and maturity is $5\%.$ Interest is paid semiannually on June $30$ and December $31.$

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Required:

$1.$ & $2.$ Record the bond issue on January $1,2024$ and first interest payment on June $30,2024.$

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$(1)$

Period$(2)$

Cash Paid for Interest$(3)$

Interest Expense$(4)$

Increase in Carrying Value$(5)$

Carrying ValueIssue Date$$$$58,4671$$$2,240$$$2,339$$$9958,56622,2402,34310358,669$

Required:

$1.$ & $2.$ Record the bond issue and first interest payment assuming the face amount of bonds payable is $$64,000.$

$3.$ Interest expense increases each period because the carrying value of the debt issued at a discount increases over time.