The following section is taken from Oriole Ltd.s balance sheet at December 31, 2019.Non-current liabilitiesBonds payable, 7%, due January 1, 2024HK$ 1,585,000Current liabilitiesInterest payable110,950Bond interest is payable annually on January 1. The bonds are callable on any interest date.Journalize the payment of the bond interest on January 1, 2020. (Credit account titles are automatically indented when amount isentered. Do not indent manually.)Date Account Titles and ExplanationJan. 1eTextbook and MediaList of AccountsDebitCreditAssume that on January 1, 2020, after paying interest, Oriole calls bonds having a face value of $503,000. The call price is 103.Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date Account Titles and ExplanationJan. 1eTextbook and MediaList of AccountsDebitCreditPrepare the entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented whenamount is entered. Do not indent manually.)Date Account Titles and ExplanationDec. 31DebitCrediteTextbook and Media

Bonds Redemption -Bonds are issued with a maturity date that indicates when the bond issuer must…

e following section is taken from Oriole Ltd.s balance sheet at December 31, 2019. on-current liabilities Bonds payable, 7%, due January 1, 2024 urrent liabilities HK$ 1,585,000 Interest payable 110,950 nd interest is payable annually on January 1. The bonds are callable on any interest date.

e following section is taken from Oriole Ltd.s balance sheet at December 31, 2019. on-current liabilities Bonds payable, 7%, due January 1, 2024 urrent liabilities HK$ 1,585,000 Interest payable 110,950 nd interest is payable annually on January 1. The bonds are callable on any interest date.

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

The following section is taken from Oriole Ltd.s balance sheet at December 31, 2019.
Non-current liabilities
Bonds payable, 7%, due January 1, 2024
HK$ 1,585,000
Current liabilities
Interest payable
110,950
Bond interest is payable annually on January 1. The bonds are callable on any interest date.
Journalize the payment of the bond interest on January 1, 2020. (Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
Date Account Titles and Explanation
Jan. 1
eTextbook and Media
List of Accounts
Debit
Credit
Assume that on January 1, 2020, after paying interest, Oriole calls bonds having a face value of $503,000. The call price is 103.
Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation
Jan. 1
eTextbook and Media
List of Accounts
Debit
Credit
Prepare the entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
Date Account Titles and Explanation
Dec. 31
Debit
Credit
eTextbook and Media

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