b. 2,150,000c. 1,800,000d. 2,000,000с.Problem 5-17 (IAA)Aye Company is authorized to issue P5,000,000 of 6%,10-year bonds dated July 1, 2020 with interest payments onJune 30 and December 31. When the bonds are issued onNovember 1, 2020, the entity received cash of P5,150,000including accrued interest.What is the discount or premium from the issuance of thebonds?150,000 bond premiumb. 50,000 bond premium150,000 bond discountd. No bond premium and discounta.с.Problem 5-18 (AICPA Adapted)On Novomber 1 2020. Mason Company issued P4,000,000 of

The right answer is option b. 50,000 bond premium

Answered: A) is authorized to issue ated July 1,…

Business

Accounting

A) is authorized to issue ated July 1, 2020 with in ecember 31. When the b 20 th entity received

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

b. 2,150,000
c. 1,800,000
d. 2,000,000
с.
Problem 5-17 (IAA)
Aye Company is authorized to issue P5,000,000 of 6%,
10-year bonds dated July 1, 2020 with interest payments on
June 30 and December 31. When the bonds are issued on
November 1, 2020, the entity received cash of P5,150,000
including accrued interest.
What is the discount or premium from the issuance of the
bonds?
150,000 bond premium
b. 50,000 bond premium
150,000 bond discount
d. No bond premium and discount
a.
с.
Problem 5-18 (AICPA Adapted)
On Novomber 1 2020. Mason Company issued P4,000,000 of

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