On January 1, 2019, REP Company purchased serial bonds with face amount of P5,000,000 and stated interest at 12%. The stated interest is payable annually on December 31. The bonds are acquired to have an effective yield at 10%. The bonds mature at annual installment at 1,250,000 every December 31. Present value of 1 at 10% for one period 0.9091 Present value of 1 at 10% for two period 0.8264 Present value of 1 at 10% for three period 0.7513 Present value of 1 at 10% for four period 0.6830 What is the carrying amount of the investment on December 31, 2020?

Q: Ellis Company issues 6.5% , five-year bonds dated January 1, 2019, with a $570,000 par value. The…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds payable.…

Q: On January 1, 2020, the Rangler Company issued $600,000 of eight-year bonds at 102. The stated…

A: Cash(600000*102/100) Dr $612000 Bond payable  Cr                      $600000 Premium on issue   Cr.…

Q: On January 1, 2021, for $18 million, Monument Company purchased 10 year, 10% bonds, dated January 1,…

A: The bonds purchased are reported as assets in the balance sheet. The interest revenue for bonds is…

Q: Four Company issued a five-year P1,000,000, 15% bonds on January 1, 2021 for P1,110,401, an issuance…

A: To prepare the amortization table and journal entries for Four Company's bonds, we need to calculate…

Q: On June 30, 2020, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at…

A:

Q: On January 1, 2022, Kristopher Co. issued ten-year bonds with a face value of $6,000,000 and a…

A: The bonds are the financial instruments of the business. The bonds are reported as long term…

Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…

A: Given: Face value= $5,000,000 i (Stated interest rate) = 14% n (Time period)= 10 x 2 = 20 Market…

Q: On December 31, 2018 Brown Company issued $600,000 of 15-year, 11% bonds payable for $558,706,…

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

Q: Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2.…

A: Under the Straight line method, a Bond premium or discount is amortized equally over the bond term…

Q: Devon Harris Company sells 10% bonds having a maturity value of 2,000,000 for 1,855,816. The bonds…

A: Bonds payable is a form of long-term debt that signifies a company's responsibility to return funds…

Q: On July 1, 2018, McNamara Company issued for $598,964, 10%, 20-year bonds with a face value of…

A: When bonds are issued at premium the premium on bonds payable is amortized over the life of the…

Q: On July 1, 2019, Choir Company issued $700,000 face value of 5%, 20 year bonds. The bonds call for…

A: Journal entries: It is the duty of the accountant to record business economic and non economic…

Q: Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2019, at a price of…

A: 1. Prepare a straight-line amortization table. Working notes: Calculate the interest expense.…

Q: Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $2,500,000 par value,…

A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…

Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $400,000. The bonds’ annual…

A: 1. Explain the amount of the premium on these bonds at issuance.

Q: The 10% bonds payable of Tulip Company had a net carrying amount of $2,850,000 on December 31, 2021.…

A: Retirement of the bonds : Retiring a bond is the process of paying off a debt obligation with funds…

Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds’ annual…

A: Given that: Par value of bonds = $720,000 Issue price of bonds $757,732

Q: pany issues four-year bonds with a $105,000 par value on January 1, 2021, at a price of $100,950.…

A: Bonds are debt instruments which are issued to raise money from investors. Bonds may be issued at…

Q: On June 1, 2019, Swifty Company sold $2,460,000 in long-term bonds for $2,157,700. The bonds will…

A: Interest payment = $2,460,000*8% Interest payment = $196,800

Q: On January 1, 2020, Kelly Company issued bonds with the face amount of P 5,000,000, 8% serial bonds…

A: The calculation of interest expense has been made as follows: Interest expense for the year=Bond…

Q: semiannually on June 30 and December 31.

A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and the par…

Q: Crane Company sells 8% bonds having a maturity value of $1,420,000 for $1,312,340. The bonds are…

A: Effective interest rate: It can be defined as the interest rate on borrowings or on any financial…

Q: On February 1, 2020, Fox Corporation issued 9% bonds dated February 1, 2013, with a face amount of…

A: Bonds Bond is a long-term financial instrument issued by a company for which the company pays…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2020, with a $500,000 par value. The…

A: Since the interest is paid semi-annually, therefore the total payments, in this case, the number of…

Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $730,000. The bonds’ annual…

A: Formula: Premium on Bonds = Sell price - PAR value Deduction of PAR value from Sell price of bonds…

Q: Devon Harris Company sells 9% bonds having a maturity value of $2,984,000 for $2,661,311. The bonds…

A: Effective interest rate refers to the income that an individual receives by holding onto the bond…

Q: Ellis Company issues 8.0%, five-year bonds dated January 1, 2021, with a $530,000 par value. The…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $400,000. The bonds’ annual…

A: 1. What is the amount of the premium on these bonds at issuance? When a company issues bonds at the…

Q: On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of…

A: Interest payment = Face value of bonds x rate of interest x time = $100 million x 6% = $6 million

Q: On January 1, 2021, Sheridan Co. issued ten-year bonds with a face value of $4,500,000 and a stated…

A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The…

A: It is a fixed income instrument that represents a loan made by an investor to a borrower ( corporate…

Q: On January 1, 2022, Patrick Company purchased serial bonds with face amount of P3,000,000 and stated…

A: Purchase price of serial bond = Present value of annual interest  payments  discounted at Yeild per…

Q: Crane Company issued $310,000,6%,10-year bonds on January 1, 2022, for $333,936. This price resulted…

A: JOURNAL ENTRIESJournal Entry is the First stage of Accounting Process. Journal Entry is the Process…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The…

A: Bonds: Bond is a debt security.The amount of interest is paid on bond.  Bond amortization:…

Q: On January 1, 2018, Piper Co. issued ten-year bonds with a face value of $1,000,000 and a stated…

A: Bond- Bonds are debt securities issued by corporations, governments, or other organizations and sold…

Q: Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds…

A: Bonds payable is a long-term liability in which the bonds has been issued in lieu of amount borrowed…

Q: On January 1, 2022 Company K issued $1,000,000, 5% bonds for $855,000. The market rate of interest…

A: One of the source used by the business organizations to meet their financial requirements is issue…

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $67,000 for $73,507 on January 1,…

A: Given that, rate of interest on bonds = 7% term of the bond = 15years Face value of bonds  $67000…

Q: On January 1, 2021, Lambda, Inc. issued ten-year bonds with a face value of $1,000,000 and an annual…

A: Bonds issued at discount: Bonds are said to be issued at discount if the issue price is less than…

Q: On January 1, 2019, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2019.…

A: A bond refers to the instrument which is issued by the government to borrow money when needed. It is…

Q: On January 1, 2024, Chang's Company issued 10% bonds dated January 1, 2024, with a face amount of…

A: Journal entry represents the account where the company records its financial transaction at the…

Q: On August 1, 2022, Bridgeport Corp. issued $483,600, 7%, 10-year bonds at face value. Interest is…

A: given that, Bridgeport Corp. issued bonds worth $483600 Rate of interest = 7% life of bond = 10…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The…

A: Bond is a borrowing security issued by the company to raise funds from the market by making an…

Q: Ellis Company issues 8.5 %, five-year bonds dated January 1, 2021, with a $540,000 par value. The…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The…

A: It is a fixed income instrument that represents a loan made by an investor to a borrower (corporate…

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.