On January 1, 2016, XYZ Corporation issues a 5,000 face value bond that sold for 90. The bond had a five-year term and paid 10% annual interest. The company used the proceeds from the bond to buy land. The land was leased for 600 of cash revenue per year and was sold at the end of the 5th year for 4,200 cash. The carrying value of the bond liability on December 31, 2020 would be? a. 4,500 b. 5,000 c. 4,900 d. 4,600

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A: Introduction: A bondholder is a person who invests in or owns debt instruments, which are typically…

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Q: On January 1, 2020, Bridgeport Corporation issued $4,920,000 of 10% bonds at 103 due December 31,…

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Q: The Smart Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The semiannual…

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Q: Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued…

A: Here,FaceValue of Bond is $150,000Issued Value is 102% of Face Value, therefore, Current Value will…

Q: NY Fitness Company issued $10,000,000, 5-year, 7% callable bond on January 1, 2018 when the market…

A: Bond: It is  the  loan paid  by an investor to a borrower. Bonds are used by companies. Interest is…

Q: On January 1, 2015 ISU issued 4%, 5 year bonds with a face amount of 50 million dollars to fund the…

A: Bond - Companies issue long-term debt as a formalized commitment to pay back the principal amount…

Q: On January 1, 2018, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $150,000.…

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Q: On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable…

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A: If you have any clarifications (i.e., expand the explanation) or want different, expanded, or…

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Q: How much interest will Flamengo pay to the bondholders on December 31 2022?

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Q: Determine the present value of the bonds at issuance.

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Q: On December 31, 2010 Stine Corporation issued $600,000, 8%, 5-year bonds.  The market rate of…

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Q: Pharoah Home Supply Company received proceeds of $744000 on 10-year, 8% bonds issued on January 1,…

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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.