Question

Kartel Company is planning to issue 2,000 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 $34,000.
3. Prepare the journal entry to record the sale of the bonds at a discount of $41,000.
4. In which of the previous three scenarios is the market rate of interest (yield) highest? How do you know?


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  • CreatedSeptember 22, 2015
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