Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $64,008 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid annually on December 31. 1. Record the bond issue. 2. Record the first interest payment on December 31, 2021. (Hint: Interest expense is 8% times the carrying value of $64,008.)

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A:

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