Response to the following problem:
JTD Corporation issued $800,000 of 20-year, 12% bonds on January 1, 2006, when the market rate of interest was 10%. Interest is payable annually on December 31. Use the present values tables in Appendix A.
a. Calculate the price of the bonds on January 1, 2006, the date the bonds were issued.
b. Calculate the bond discount or premium that arises upon issuance.
c. Prepare the journal entry to record the issuance of the bonds on January 1, 2006.