1a. Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $67,000 for $67,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 7%. 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.)

1b. Presented below is a partial amortization schedule for Premium Pizza.

(1)		(2)				(3)				(4)				(5)
Period		Cash Paid for Interest				Interest Expense				Decrease in Carrying Value				Carrying Value
Issue date														$	71,144
1		$	1,980			$	1,779			$	201				70,943
2			1,980				1,774				206				70,737

Required:

1. & 2. Record the bond issue and first interest payment assuming the face amount of bonds payable is $66,000.(If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

1c. Interest expense decreases each period because the carrying value of the debt issued at a premium decreases over time. Is this TRUE or FALSE?

1d. On January 1, 2021, Lizzy's Lemonade issues 6%, 10-year bonds with a face amount of $95,000 for $88,249, priced to yield 7%. Interest is paid semiannually.

What amount of interest expense will be recorded on June 30, 2021, the first interest payment date? (Round your final answer to the nearest whole dollar amount.)