On January 1, 2014, Applied Tech Corporation (ATC) issued $600,000 in bonds that mature in 10 years.

Question:

On January 1, 2014, Applied Tech (ATC) issued $600,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 10 percent. When the bonds were issued, the market interest rate was 10 percent. The bonds pay interest once per year on December 31.
Required:
1. Determine the price at which the bonds were issued and the amount that ATC received at issuance.
2. Prepare the journal entry to record the bond issuance.
3. Prepare the journal entry to record the interest payment on December 31, 2014. Assume no interest has been accrued earlier in the year?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...