E10-7 Preparing Journal Entries to Record Issuance of Bonds and Payment of Interest [LO 10-3]

On January 1, 2013, Applied Technologies Corporation (ATC) issued $690,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 11 percent. When the bonds were issued, the market interest rate was 11 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 bond issuance and the interest payment on December 31, 2013, 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.)
	Record the issuance of bonds of $690,000. Record the interest payment on December 31, 2013.