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Pretzelmania, Inc., issues 5%, 20-year bonds with a face amount of $68,000 for $77,301 on January...

Pretzelmania, Inc., issues 5%, 20-year bonds with a face amount of $68,000 for $77,301 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 4%. 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.)

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Answer #1

Solution:

1) Journal entry for the bond Issue:

2) Journal entry for first Interest payment :

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