14. On the first day of 2021, TrueTech Companies had outstanding $1,000,000 of 10% bonds with a book value of $971,000. Truetech called the bonds on July 1, 2021 at the price of $987,500. The bonds were previously issued at a price to yield 12% and interest payable semi-annually on July 1 and January 1. What is the amount of the loss on early extinguishment?

Q: LA Fitness Company issued a $10,000,000, 5-year, 7% callable bond on January 1, 2018, when the…

A: In the given question neither the face value of bond , nor the issue price of bond is given.…

Q: On January 1, 2021, Tiny Tim Industries had outstanding $1,000,000 of 8% bonds with a book value of…

A: A bond is the long-term debt of an entity. The bonds are paid in more than one year. The bonds…

Q: The Smart Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The semiannual…

A: The objective of the question is to calculate the interest expense for the bond interest payment on…

Q: NY Fitness Company issued $10,000,000, 5-year, 7% callable bond on January 1, 2018 when the market…

A: Bond: It is  the  loan paid  by an investor to a borrower. Bonds are used by companies. Interest is…

Q: On July 1, 2023, JMM Limited issued bonds with a face value of $930,000 due in 20 years, paying…

A: Bonds are the debt instruments that corporations generally issue to raise money, The government…

Q: Schaffer Corporation issued $640,000 of 5%, 12-year bonds payable on March 31, 2022. The market…

A: Bonds payable refer to long-term debt securities issued by corporations, municipalities, or…

Q: Crane Ltd issued $1,200,000 of 10years, 5% bonds on January 1,2024,when the market interest rate was…

A: Approach to solving the question: For better clarity of the solution, I have attached the Excel…

Q: On the first day of 2021, Rooney Inc had outstanding $1,000,000 of 9% bonds with a book value of…

A: Explanation: We should compare the amount we pay for the bonds and the book value of the bonds:…

Q: Ignoring interest, compute the gain or loss. Loss on redemption   $   Ignoring interest, record…

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: On March 1, 2021, Baddour, Inc., issued 12% bonds, dated January 1, with a face amount of $165…

A: 1. Compute amount of bonds report in its balance sheet as shown below:     Working note:   Compute…

Q: On January 1, 2018, Wauwatosa Inc. issued 5- year bonds with a fave value of $200,000 and a stated…

A: When the issue price of the bond is higher than its face value, the bonds are said to be issued at a…

Q: On February 1, 2021, Cromley Motor Products issued 9% bonds, dated February 1, with a face amount of…

A:

Q: Hartley Corporation issued $560,000 of 5%, 10-year bonds payable on March 31, 2022. The market…

A: Face Value of the bonds = $576,000Life = 10 YearsCoupon rate = 5% p.a.Market rate of interest = 8%…

Q: On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of…

A: An income statement helps in analyzing where to increase the revenue and decrease the cost to…

Q: The balance sheet of Rays Corporation as of December 31, 2022, included 10.25% bonds having

A: Total Debit to p&l = Discount on issue of debentures + Premium on redemption of Debentures.

Q: On January 1, 2025, Larkspur Corporation issued $560,000 of 7% bonds, due in 10 years. The bonds…

A: When the bonds are issued at less than their face value, it is said that the bonds are issued at…

Q: On June 30, 2020, Nash Company issued $3,730,000 face value of 14%, 20-year bonds at $4,291,220, a…

A: Premium on Bonds payable = Issue price of bonds - Face value of bonds = $4,291,220 - $3,730,000 = $

Q: 3.) Blue Denim Company invests $10,000,000 in 6% fixed rate corporate bonds on January 1, 2020. All…

A: Debt securities not classified as Trading or HTM are classified as AFS. It is initially recorded at…

Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest…

A: Maturity period = December 31, 2020 to December 31, 2025 = 5 years Semi annual period = 5 years x 2…

Q: On January 2, 2012, Tamarisk Corporation issued $1,650,000 of 10% bonds at 96 due December 31, 2021.…

A: First step is to compute the total discount on the issue of bonds on jan 2012.This will be computed…

Q: Tahoe Tent Ltd. issued bonds with a par value of $803,000 on January 1, 2023. The annual contract…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: A company issued a 3,000,000 6-year bonds dated January 1,2021, with a stated interest rate of 11%.…

A: Carrying value of the bonds = Present value of principal + Present value of interest payments where,…

Q: Colwood Candies issued $370,000 of 12%, five-year bonds on January 1, 2020, when the market interest…

A: Amortization schedule is the one which is prepared to record the interest incurred during a period,…

Q: Nash Co. sells $534,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and…

A: Bonds represent debts issued by the firm to meet the capital requirements. They act as a promise by…

Q: On July 1 2021, espresso industries issued $700000 of 12 % bonds, dated July 1. Interest is payable…

A: Face value = $700,000Coupon rate =12%Maturity = 3 yearsYield to maturity = 14%Proceeds =…

Q: A company issued a P3,000,000, 6-year bonds dated January 1, 2021, with a stated interest rate of…

A: Solution Carrying value of bond refer to the net amount between the bonds face value plus any…

Q: On March 31, 2020, a calendar-year corporation sold 8% bonds with a face value of $6,000,000. These…

A: Discount on issue can be calculated by subtracting the book value of bonds from bonds payable value.…

Q: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of…

A: Given information Face value of bond = P 8,000,000 Life of bond = 6 years Number of periods = 6 x…

Q: Skysong, Incorporated sold its 8% bonds with a maturity value of $7,920,000 on August 1, 2019 for…

A: A bond is a debt security. It is a fixed income investment that represents a loan made by investor…

Q: On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable…

A: Definition:   Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by…

Q: 18. On January 1, 2020, Puckett Co. issued $50,000 of 8%, ten-year bonds at 98. Issuance costs…

A: In this question, loss on redemption shall be  Loss on bond retainment =Redemption price of bond…

Q: Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and…

A: The bonds are issued either by government entities or corporations to raise money. A bond is a debt…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.