Question

Check my work Pretzelmania, Inc., issues 5%, 20-year bonds with a face amount of $65,000 for $57,488 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31. Required: 1.& 2.Record the bond issue and first interest payment on June 30, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your intermediate computations and final answers to the nearest whole dollar amount.) View transaction list X 1 Record the bond issue. 2 Record the first interest payment. Credit 8 Note =journal entry has been entered Record entry View general journal Clear entry

need help on both transactions and the steps to get the answers please, thank you!(:

Answer 1

Date	General Journal	Debit	Credit
January. 1, 2021	Cash	$57,488
	Discount on bonds payable	$7,512
	Bonds payable		$65,000
June 30,2021	Interest expense	$1,725
	Discount on bonds payable		$100
	Cash		$1,625

Semi annual interest payment = 65,000 x 5% x 6/12

= $1,625

Interest expense on June 30, 2021 = Carrying value of bonds x Market interest rate

= 57,488 x 3%

= $1,725

Discount on bonds payable amortized on June 30, 2021 = Interest expense - Interest payment

= 1,725-1,625

=$100

Kindly comment if you need further assistance. Thanks‼!