Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31.1. Record the bond issue.2. Record the first interest payment on June 30, 2021.

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A:

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Q: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1,…

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A: Requirement 1:   Compute the amount of liability.

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A: 1. Explain the amount of the premium on these bonds at issuance.

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A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

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A: Please see Step 2 for required information.

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Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,799 on January 1,…

A:

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A: Answer 1:

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Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1,…

A: Premium on bonds payable=Issue price-Par value=$76,860-$70,000=$6,860

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Q: On March 1, 2021, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of…

A:

Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds' annual…

A: Premium on bonds at the time of issuance = Issue price of bonds - Face value of bonds