Mania Enterprises issued 11% bonds dated January 1, 2020, with a principal amount of OR 60 million. The bonds mature in 2029 (10 years). For bonds of similar risk and maturity, the market yield is 9%. Interest is paid semiannually on June 30 and December 31. Present value factor of ordinary annuity of $ at (i=4.5%,n=20) = 13.00794 Present value of $1 at (i=4.5%,n=20) = 0.41464 Required: 1. Determine the price of the bonds on January 1, 2020. 2. Prepare the journal entry to record the bond issuance by Mania on January 1, 2020. 3. Prepare the journal entry to record interest on June 30, 2020, using the effective interest method

Q: On January 1, 2025, Blossom Co. issued ten-year bonds with a face value of $6,750,000 and a stated…

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A: GIVEN   On January 1, 2021, Instaform, Inc., issued 12% bonds with a face amount of $60 million,…

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Q: On January 1, 2020, Johny Industries issued ten-year bonds with a face value of $2,000,000 and a…

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Q: Determine the selling price of the bonds.

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A: Calculate the issue price of the bonds.

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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.