Pizza Pier Issues 7%, 10-Year Bonds with a Face Amount

question 98

Essay

Pizza Pier issues 7%, 10-year bonds with a face amount of $80,000 on January 1, 2012. The market interest rate for bonds of similar risk and maturity is also 7%. Interest is paid semiannually on June 30 and December 31.
1. Record the bond issue.
2. Record the first interest payment on June 30, 2012.

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Definitions:

Catholicism

The branch of Christianity headed by the Pope, with its spiritual and administrative center located in the Vatican City.

Puritanism

A religious reform movement originating in the late 16th century within the Church of England, emphasizing a strict and literal interpretation of the Bible and a pious, disciplined lifestyle.

Trinity

In Christian doctrine, the unity of Father, Son, and Holy Spirit as three persons in one Godhead.

Jesuits

A Catholic religious order founded in 1540 by Ignatius of Loyola, known for its emphasis on education, missionary work, and cultural influence.