Glen Pool Club, Inc., has an installment loan outstanding with a current balance of $141,000. The company makes monthly installments of $1,450, which include interest computed at an annual rate of 6 percent. a. Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the loan’s unpaid balance. b. Prepare the journal entry to record the second monthly payment. c. Will monthly interest increase, decrease, or stay the same over the life of the loan?

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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.