On December 31, 2020, Blossom, Inc. sold $3,950,000 (face value) of bonds. The bonds are dated December 31, 2020. pay interest annually on December 31, and will mature on December 31, 2020. The following schedule was prepared by the accountant for 2020. Annual Interest Period Interest to be paid (a1) Interest Expense $197.500 $232.260 Amortization Stated interest rate. On the basis of the above information, answer the following questions. What is the stated interest rate for this bond issue? $34,760 Unamortized Amount $79,000 44,240 Bond Carrying Value $3,871,000 3,905,760

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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.