Automated Student Acc Chapter 10 HW es Bu Check Your Work ezto.mheducation.com/h

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Automated Student Acc Chapter 10 HW es Bu Check Your Work ezto.mheducation.com/hm.tpx Bookmarks ESCI 111 Quiz 10 F value 0.52 points E10-7 Preparing Journal Entries to Record Issuance of Bonds and Payment of Interest [LC On January 1, Applied Technologies Corporation (ATC) issued $560,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 8 percent. When the bonds were issued, the market interest rate was 8 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. Complete the required journal entries to record the band issuance and the first interest payment on December 31 assuming no interest has been accrued earlier in the year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of bonds of $560,000.

Explanation / Answer

1) Amount received t issuance = $560000

(Coupon interest rate and market interest rate are same. So, Bond will be issued at par value)

2) Interest on December 31 = 560000*8% = 44800

Journal Entry:

Issuance of bond on January 01:

Cash DR 560000

Bond payable CR 560000

Interest paid on Bond on December 31:

Interest DR 44800

Cash CR 44800

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