On January 1, 2020, Beckham acquired a 2,000,000, 5-year bond, 10% bond for 2,169,329. Transaction cost was 4,500. The ongoing interest rate on the date of the acquisition of the bonds was 7.8328%. The fair value of the bond at the end of each year are listed below: Dec 31, 2020 101 Dec 31, 2021 98 Dec 31, 2022 105 5. How much is the bond premium/discount? Show your solutions a. 169,329 c. 200,000 b. 173,829 d. 4,500 6. How much is the value of the bond at initial recognition using FVOCI? Show your solutions a. 2,169,329 c. 2,173,829 b. 2,144,100 d. 2,000,000

Q: On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature…

A: The journal entry is the first stage in entering a transaction into the books of accounts. Bonds are…

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

A: The borrowers issue bonds to raise money from investors willing to lend them money for a certain…

Q: On January 1, 2023, Bridgeport Corporation purchased a newly issued $1,250,000 bond. The bond…

A: The price of a bond is equal to the sum of the present value of coupon payments and the present…

Q: (b) Bonita Co. sells $431,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and…

A: Bond Accounting refers to the recording of bond related transactions i.e. issuance of bond at par,…

Q: On January 2, 2020, Carla Corporation issued $1,200,000 of 10% bonds at 96 due December 31, 2029.…

A: The loss on redemption of the bond payable is recorded when the amount paid for such redemption is…

Q: On January 1, 2020, Bridgeport Corporation issued $5,180,000 of 10% bonds at 102 due December 31,…

A: Bonds refer to a security issued by the lender to the borrower while providing money for a certain…

Q: nterest at 6% every June 30 and December 31. The market interest rate 31, and the company had the…

A: The amortization cost model provides insight into how bond prices change over time due to the…

Q: On June 1, 2024, Carla Vista Bottle Company sold $2,880,000 in long-term bonds for $2,526,064. The…

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

Q: Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted…

A: Effective Interest Method: It is an accounting method that helps in calculating the discount on…

Q: Your answer is partially correct. On January 2, 2020, Headland Corporation issued $2,000,000 of 10%…

A: Bonds can be issued at a discount. The discount on bonds cane be amortized using the straight line…

Q: 12A. On December 31, 2025, when the market interest rate is 14%, Arnold Corporation issues $150,000…

A: The information given are as follows:Market Rate of interest per semi-annual period = 14%/2 = 7%No.…

Q: On September 30, 2021, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of…

A: Calculate the present value of the principal amount as shown below:

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

A: A firm or group may issue bonds payable as a form of long-term debt to raise capital from investors.…

Q: Crane Company issues $25300000, 8.0%, 5-year bonds dated January 1, 2024 on January 1, 2024. The…

A: The bonds are the long-term liabilities that are issued to raise the money from the market orThe…

Q: On January 2, 2020, Whispering Corporation issued $1,700,000 of 10% bonds at 97 due December 31,…

A: Loss on RedemptionThe profit or loss on a bond redemption is frequently quite easy to determine. The…

Q: On January 2, 2020, Martinez Corporation issued $1,700,000 of 10% bonds at 97 due December 31, 2029.…

A: Bonds are the securities which are issued by the entities in order to raise capital for the…

Q: On January 2, 2020, Blue Corporation issued $1,850,000 of 10% bonds at 96 due December 31, 2029.…

A: Loss on RedemptionThe profit or loss on a bond redemption is frequently quite easy to determine. The…

Q: 5. On January 1, 2024, Hart Co. redeemed (retired) its 15-year bonds of $500,000 par value for 102.…

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

Q: Nash Co. sells $534,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and…

A: Bonds represent debts issued by the firm to meet the capital requirements. They act as a promise by…

Q: On January 2, 2020, Sage Corporation issued $1,250,000 of 10% bonds at 97 due December 31, 2029.…

A: The issuer of the bond is required to make the payment of the face value of the bond at the end of…

Q: 1. On June 1, 2019, Everly Bottle Company sold $3,000,000 in long-term bonds for $2,631,300. The…

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

Q: On January 1, 2019, Company X issued $550,000 of twenty-year bonds when a market rate was 2%. The…

A: The carrying value of a bond refers to the face value plus any unamortized premium or minus any…

Q: Crane Company issues $26400000, 8.0%, 5-year bonds dated January 1, 2024 on January 1, 2024. The…

A: Time Value of Money :— According to this concept, value of money in present day is greater than the…

Q: On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds…

A: Bonds are a long-term liability that are issued for a fixed term. A periodic fixed interest is paid…

Q: On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. The bonds…

A: Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

Q: On January 1,2020, ABC Corporation issued a 5-year, 10%, 1,000 of the P 5,000 face value bonds with…

A: Carrying value of the bonds retired as of December 31, 2022 = Present value of principal + Present…

Q: On January 2, 2020, Tamarisk Corporation issued $1,000,000 of 10% bonds at 96 due December 31, 2029.…

A: The redemption of an investment may generate a capital gain or loss, both of which are recognized on…

Q: s when the bonds were issue to the market. These will be amortized ing amortized on a straight-line…

A: Loss of redemption is the difference between carrying or book value of bond and redemption value.…

Q: On January 2, 2020, Stellar Corporation issued $1,850,000 of 10% bonds at 96 due December 31, 2029.…

A: Loss on Redemption The profit or loss on a bond redemption is frequently quite easy to determine.…

Q: On September 30, 2024, the Techno Corporation issued 8% stated rate bonds with a face amount of $280…

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

Q: Prepare a bond premium amortization schedule for the first 4 interest periods.

A: Bond :- A form of Debt instruments which is issued by Companies & Governments. It is a type of…

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.