On January 1, 2010, Applied Technologies Corporation (ATC) issued
$600,000 in bonds that mature in 10 years. The bonds have a stated
interest rate of 10 percent. When the bonds were issued, the market
interest rate was 10 percent. The bonds pay interest once per year on
December 31.
Required:
1.Determine the price at which the bonds were issued and the amount that ATC received at issuance.
2. Prepare the journal entry to record the bond issuance. (Omit the \"$\" sign in your response.)
3. Prepare the journal entry to record the interest payment on December
31, 2010, assuming no interest has been accrued earlier in the year.
4. What is the total cost of borrowing for this bond for Applied Technologies?
