Issuing at Par, a Premium, or a Discount Dash Enterprises is planning to issue 1
ID: 2474349 • Letter: I
Question
Issuing at Par, a Premium, or a Discount
Dash Enterprises is planning to issue 1,500 bonds, each having a face amount of $1,000.
1. Prepare the journal entry to record the sale of the bonds at par.
Journal
Account and Explanation
Debit
Credit
Record issuance of bonds at par
Prepare the journal entry to record the sale of the bonds at a premium of $19,000. If an amount box does not require an entry, leave it blank.
Journal
Account and Explanation
Debit
Credit
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 6 of Item 2
Correct 7 of Item 2
Correct 8 of Item 2
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 9 of Item 2
Correct 10 of Item 2
Correct 11 of Item 2
Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Correct 12 of Item 2
Correct 13 of Item 2
Correct 14 of Item 2
Record issuance of bonds at premium
Hide FeedbackShow All Feedback
Check My Work Feedback
Post Submission Feedback
Solution
3. Prepare the journal entry to record the sale of the bonds at a discount of $32,000. If an amount box does not require an entry, leave it blank.
Journal
Account and Explanation
Debit
Credit
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 6 of Item 3
Correct 7 of Item 3
Correct 8 of Item 3
Bonds Payable
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 9 of Item 3
Correct 10 of Item 3
Correct 11 of Item 3
Bonds Payable
Cash
Discount on Bonds Payable
Interest Payable
Premium on Bonds Payable
Correct 12 of Item 3
Correct 13 of Item 3
Correct 14 of Item 3
Record issuance of bonds at discount
Hide FeedbackShow All Feedback
Check My Work Feedback
Post Submission Feedback
Solution
4. Conceptual Connection: Assuming the stated rate is identical for the previous three scenarios, in which scenario is the market rate of interest (yield) highest?
The bonds sell at SelectdiscountparpremiumCorrect 1 of Item 4
How do you know?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
blank
Journal
Account and Explanation
Debit
Credit
Record issuance of bonds at par
Prepare the journal entry to record the sale of the bonds at a premium of $19,000. If an amount box does not require an entry, leave it blank.
Journal
Account and Explanation
Debit
Credit
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 6 of Item 2
Correct 7 of Item 2
Correct 8 of Item 2
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 9 of Item 2
Correct 10 of Item 2
Correct 11 of Item 2
Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Correct 12 of Item 2
Correct 13 of Item 2
Correct 14 of Item 2
Record issuance of bonds at premium
Hide FeedbackShow All Feedback
Check My Work Feedback
Post Submission Feedback
Solution
Hide3. Prepare the journal entry to record the sale of the bonds at a discount of $32,000. If an amount box does not require an entry, leave it blank.
Journal
Account and Explanation
Debit
Credit
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 6 of Item 3
Correct 7 of Item 3
Correct 8 of Item 3
Bonds Payable
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Correct 9 of Item 3
Correct 10 of Item 3
Correct 11 of Item 3
Bonds Payable
Cash
Discount on Bonds Payable
Interest Payable
Premium on Bonds Payable
Correct 12 of Item 3
Correct 13 of Item 3
Correct 14 of Item 3
Record issuance of bonds at discount
Hide FeedbackShow All Feedback
Check My Work Feedback
Post Submission Feedback
Solution
4. Conceptual Connection: Assuming the stated rate is identical for the previous three scenarios, in which scenario is the market rate of interest (yield) highest?
The bonds sell at SelectdiscountparpremiumCorrect 1 of Item 4
How do you know?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
blank
Explanation / Answer
Dash Enterprises is planning to issue 1,500 bonds, each having a face amount of $1,000.
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. If an amount box does not require an entry, leave it blank.
3. Prepare the journal entry to record the sale of the bonds at a discount of $32,000. If an amount box does not require an entry, leave it blank.
4. Conceptual Connection: Assuming the stated rate is identical for the previous three scenarios, in which scenario is the market rate of interest (yield) highest?
The bonds sell at discount
How do you know?
There is inverse relationship between yield & price , if the yield is higher than the coupon rate than bond is trading at discount and , if the yield is lower than the coupon rate than bond is trading at premium and if the yield is equal to the coupon rate than bond is trading at par, The highest yield rate would be only in case of discount bonds
Account and Explanation Debit Credit Cash 1,500,000 Bonds Payable 1500000 Record issuance of bonds at parRelated Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.