January 1, 2020, an investor company acquires $249,000 of the investee company’s 4% bonds at a price of $179,000. Interest is received on January 1 of each year, and the bonds mature on January 1, 2030. The investment will provide the investor a 10% yield (assumed for ease of computation. Please do not attempt computations beyond years necessary). The bonds are classified as held-to-maturity. Applying the effective-interest method, for the year of 2020, the investor company will record Interest Revenue of $__________.

Q: On January 1, 2020, Pronghorn Company purchased 6% bonds, having a maturity value of $550,000 for…

A: Investment means an asset purchased in expectation of earning a return on such investment in future…

Q: On January 1, 2019, Charlie Company. issued its 10 percent bonds in the face amount of P1,500,000.…

A: The bonds payable are issued at discount when market rate is higher than the coupon rate of bonds…

Q: Chowan Corporation issued $198,000 of 8% bonds dated January 1, 2019, for $191,470.07 on January 1,…

A: Discount on bonds payable is first calculated which is the difference of Bonds par value and the…

Q: On December 31, 2019, Spearmint, Inc, issued $450,000 of 9 percent, 3-year bonds for cash of…

A: Interest payment  on June 30,2020 = Face value of bonds x rate of interest x no. of months/12 =…

Q: On January 3, 2020, Ivanhoe Company acquires $400000 of Adam Company's 10-year, 10% bonds at a price…

A: Interest revenue is a measure of the interest earned by a business over a given period. Since…

Q: On January 1, 2019, CupCompany purchased NoodlesCorporation, 9% bonds with a face value of…

A: Unrealized gain (loss) reported in other comprehensive income for the year 2019: Unrealized gain…

Q: Before maturity, Foster Incorporated sold $500,000 of 12% bonds on January 1, 2019, for $470,143.47,…

A:

Q: On January 1, 2019, AB Company purchased P1,000,000, 12% bonds of C Company for a price that yields…

A: Debt Investment: It is fixed-interest generating securities  to earn a steady interest income and…

Q: On January 1, 2020, CAB Co. issued 9% bonds in the amount of P2,500,000, which mature on January 1,…

A: Interest method of amortization: This is a method useful for bonds which are sold at a discount. The…

Q: Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to…

A: Year Cash flow PVF @10% PV of Cash flow 2020      37,200 0.909      33,818.18 2021      37,200…

Q: On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation to yield…

A: Face value of bond $30,000.00 Coupon rate 6% Effective interest rate 10.00% Years to maturity…

Q: On January 1, 2020, Bonita Company purchased 12% bonds, having a maturity value of $320,000 for…

A: There are two methods of amortizing the premium or discount of bonds that are issued at a price…

Q: On July 1, 2020, Martinez Corporation purchased at par 6% bonds having a maturity value of $350,000.…

A: Interest revenue = Debt investment x interest rate x no. of years = 350,000 x 6% x 1 = $21,000

Q: Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization…

A: 1. Below is the Journal Entry for the Purchase of the Bonds Date  Particulars   Debit   Credit…

Q: 20, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds…

A: The amount of interest expense, interest payment, and discount or premium amortization of a bond in…

Q: nterest at 6% every June 30 and December 31. The market interest rate 31, and the company had the…

A: The amortization cost model provides insight into how bond prices change over time due to the…

Q: On January 1, 2020, Sage Company purchased  11% bonds, having a maturity value of $ 301,000 for $…

A: Bond purchased: In order to obtain money from investors who are prepared to lend them money for a…

Q: On January 1, 2020, Kingbird, Inc. purchased 11% bonds having a maturity value of $541,000 for…

A: The following journal entries are passed to show the investment in bonds.

Q: On January 1, 2020, Cheyenne Company purchased 4% bonds, having a maturity value of $420,000 for…

A: Journal entry is the procedure for initially documenting commercial transactions in the books of…

Q: 1. On July 1, 2019, Hello Corporation acquired an investment at amortized cost in Screen Company's…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: On January 1, 2019, Calvert Company issues 11%, $100,000 face value bonds for $103,587.53, a price…

A: Lets understand the basics.Premium of discount on issue of bond can be amortized using,(1) Effective…

Q: (a) (b) (c) Prepare the journal entry at the date of the bond purchase. Prepare the journal entries…

A: Journal is a prime book of entry.  We will pass the entries in the General Journal as under…

Q: Bryan Company issued $780,000 of 8% face value bonds on January 1, 2019, for $763,800. The bonds are…

A:

Q: On January 1,2019, DELO Company purchased 456B Corporation, 9% bonds with a face value of P4,000,000…

A: Interest revenue for 2019 = P3,756,000 * 10% = P375,600 Interest paid for 2019 = P4,000,000*9% =…

Q: On March 1, 2021, Brown-Ferring Corporation issued $100.0 million of 15% bonds, dated January 1,…

A: Accrued Interest- In accounting, accrued interest refers to the sum of interest that has been…

Q: On June 1, 2019, Swifty Company sold $2,460,000 in long-term bonds for $2,157,700. The bonds will…

A: Interest payment = $2,460,000*8% Interest payment = $196,800

Q: On January 1, 2020, Metlock Company acquires $110,000 of Spiderman Products, Inc., 9% bonds at a…

A: The question is based on the concept of Financial Accounting.

Q: On January 1, 2020, Oriole Company purchased 12% bonds, having a maturity value of $ 310,000 for $…

A: Bonds- Bonds are those monetary securities that are issued by banks, governments, companies so as to…

Q: On January 1, 2025, Swifty Company purchased 12% bonds having a maturity value of $312,000 for…

A: Investment means an asset purchased in expectation of earning a return on such investment in future…

Q: uppose Hale and Sons purchases $800,000 of 3.5% annual bonds of Tyson Way Corporation at face value…

A: Requirement 1: The journal entry recorded for the transactions related to bonds for 2018 is as…

Q: On January 1, 2020, Ayayai Company purchased 9% bonds having a maturity value of $250,000, for…

A: Bonds are debt securities issued by governments, municipalities, corporations, or other entities to…

Q: On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc.,  9% bonds at a…

A:

Q: On January 1, 2020, Ayayai Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a…

A: BondsThe financial or legal instrument that represents a loan taken by a person is called a bond.…

Q: On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds.

Q: On January 1, 2020, Grouper Company purchased 12% bonds having a maturity value of $350,000, for…

A: The below journal entries are passed to show the treatment of interest revenue and premium…

Q: On January 1, 2020, Windsor Company purchased 10% bonds having a maturity value of $340,000, for…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: On June 30, 2021, Arlington Company issued $2,100,000 of 10-year, 3% bonds, dated June 30, for…

A: The bonds are the financial instruments that are used to raise money from the market.

Q: Polk Incorporated issued $200,000 of 13% bonds on July 1, 2019, for $206,801.60. The bonds were…

A: The following computations are done for Polk Incorporation.

Q: On January 1, 2026, ABC purchased term bonds (to be held by collecting contractual cash flows…

A: A bond is a kind of debt financial instrument that helps a corporation to raise capital from the…

Q: On January 1, 2020, Marin Company purchased at par 7% bonds having a maturity value of $370,000.…

A: Date Particulars Debit Credit a. Investment in 7% bonds $370,000     Cash   $370,000   (to…

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.