Question

Pretzelmania, Inc., issues 5%, 10-year bonds with a face amount of $68,000 for $68,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid annually on December 31.

Required:
Record the bond issue and first interest payment on June 30, 2021.

Answer 1

Here the answer is given as follows,