On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including accrued interest and commission.  The commission to acquire the bonds was P5,000. The bonds are dated January 1, 2020 and mature on January 1, 2025, and pay interest semi-annually on January 1 and July 1.  On December 31, 2020, the bonds had a fair value of P920,000.  On April 1, 2021, Purefoods sold the bonds for a total consideration of P950,000.   How much is the gain from the sale of investment in debt securities on April 1, 2021?

Q: On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid…

A: Bonds refers to the financial instrument issued in the market to collect the funds. Interest is paid…

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: 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 April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A: Carrying amount of bond investment = Total consideration paid - accrued interest = P910,000 - 20000…

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 January 1, 2020, EF company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields…

A: If face value of the bonds is less than the purchase price then such debt investments are purchased…

Q: On April 1, 2020, Q2 Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A: Gain on Sale of Investment = Sale Proceeds - Carrying Amount

Q: On April 1, 2020, Purefoods Company purchased a bond for P910,000 including accrued interest and…

A: The amount by which the proceeds from the sale of investments were greater than the carrying value…

Q: On July 1, 2020, Riverbed Company purchased $3,840,000 of Duggen Company’s 8% bonds, due on July 1,…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid…

A:

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

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: On January 1, 2020, Garland Company purchased bonds with a face amount of P8,000,000 for P7,679,000…

A: Investment is recognized at fair value and that value of the investment is increased by the interest…

Q: On January 1, 2022, Lenore Corp. purchased $400,000 of 6% bonds for $427,750, which they are…

A: Journal entries refer to the recording of business transactions in the format of debt and credit…

Q: On January 1, 2019, Hyde Corporation purchased bonds with a face value of $300,000 for $308,373.53.…

A: A journal entry is used to document any commercial transaction in the accounting records of a…

Q: On January 1,2019, DEF Company purchased 456B Corporation, 9% bonds with a face value of P 4,000,000…

A: Interest revenue for the year 2019 = Bond investment * Effective interest rate

Q: On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid…

A: SOLUTION- Bonds refers to the financial instrument issued in the market to collect the funds.…

Q: a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method.…

A: “Since you have posted a question with multiple subparts, we will be solving the first three…

Q: On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including…

A: Bonds are purchased on 1 april 2020 at 910000 which include interest of P20,000 of three month and…

Q: On January 1, 2019, QQQ Company purchased bonds with face amount of P5,000,000 for P4,760,000…

A: Given: On January 1, 2019, QQQ Company purchased bonds with face amount of P5,000,000 for P4,760,000…

Q: On January 1, 2019, QQQ Company purchased bonds with face amount of P5,000,000 for P4,760,000…

A: On 01.01.2019, QQQ company purchased bonds = P4760000 Including transaction cost = P160000 Face…

Q: On 1 January 2020, Maple Ltd. purchased $500,000 of Pine Ltd. 7% bonds. The bonds pay semi-annual…

A: A.             Given        Bond Value = $500000,   Coupon Rate =7% p.a.  , Yield Rate =…

Q: On January 1, 2020, EF company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields…

A: Bonds: Bonds are the financial security that are being tradeable in the stock market by the…

Q: On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid…

A:

Q: On January 1, 2021, Marena Company issued bonds with a face amount of P3,500,000 for P3,765,300. The…

A: The company can raise the required capital by issuing the shares, debentures, bonds, etc., These are…

Q: Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are…

A: The financial instrument issued at a premium. In this scenario, the difference between the amount…

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.