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LO.2 On January 1, 2020, Kunto, a cash basis taxpayer, pays $46,228 181 to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $50,000. In your computations: a. Compute Kunto's gross income from the certificate for 2020. b. Compute Kunto's gross income from the certificate for 2021. Round any amounts to the nearest dollar.

LO.2 On January 1, 2020, Kunto, a cash basis taxpayer, pays $46,228 181 to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $50,000. In your computations: a. Compute Kunto's gross income from the certificate for 2020. b. Compute Kunto's gross income from the certificate for 2021. Round any amounts to the nearest dollar.

FINANCIAL ACCOUNTING
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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Please use microsoft excel for calculations.
LO.2 On January 1, 2020, Kunto, a cash basis taxpayer, pays $46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $50,000. In your computations: a. Compute Kunto's gross come from the certificate for 2020. b. Compute Kunto's gross income from the certificate for 2021. Round any amounts to the nearest dollar.
Transcribed Image Text:LO.2 On January 1, 2020, Kunto, a cash basis taxpayer, pays $46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $50,000. In your computations: a. Compute Kunto's gross come from the certificate for 2020. b. Compute Kunto's gross income from the certificate for 2021. Round any amounts to the nearest dollar.
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