Dash Enterprises is planning to issue 1,500 bonds, each having a face amount of $1,000.
Required:
1. Prepare the journal entry to record the sale of the bonds at par.
2. Prepare the journal entry to record the sale of the bonds at a premium of $19,000.
3. Prepare the journal entry to record the sale of the bonds at a discount of $32,000.
4. Assuming the stated rate is identical for the previous three scenarios, in which scenario is the market rate of interest (yield) highest? How do you know?