Pretze mania, Inc. issues 5%, 20-year bonds with a ace amount of S53 000 for S46

Question

Pretze mania, Inc. issues 5%, 20-year bonds with a ace amount of S53 000 for S46.920 on January 1 2018. The market interest rate or bonds of s mi ar risk and maturity is 696. Interest s paid annually on December 31. 1. & 2. Record the bond issue and first interest payment on December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Record the bond issue. Record the first interest payment. Credit Note :·= journal entry has been entered Record entry Clear entry View general journal

Explanation / Answer

Jan-1-18 Cash 46920 Discount on bonds payable 6080       Bonds payable 53000 Dec-31-18 Interest expense 2815 =46920*6%        Discount on bonds payable 165        Cash 2650 =53000*5%

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