On January 1, Applied Technologies Corporation (ATC) issued $550,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 12 percent. When the bonds were issued, the market interest rate was 12 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. & 3. Prepare the required journal entries to record the bond issuance and the first interest payment on December 31 assuming no interest has been accrued earlier in the year.
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