On January 1, 2020, Lucas Company purchased P1,200,000, 14% bonds of Andres Company for P1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?

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A: Bonds represent the loan for the company on which a percentage of interest has to be paid by the…

Q: a. Jason Allen Co. sold $2,080,000 of 12%, 10-year bonds at 102 on January 1, 2025. The bonds were…

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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…

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A: Following is the given information:

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

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Q: 21.Refer to the information in Question No. 20. How much is the interest income for the year 2022?…

A: This post has several questions. Q21 has been answered below:

Q: Crane Electric sold $6,240,000, 10%, 10-year bonds on January 1, 2022. The bonds were dated January…

A: Solution: When bonds are redeemed before maturity date, difference between carrying value and…

Q: Stellar Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated…

A: When bonds are issued at a price more than face value, then it means they are issued at a premium.…

Q: On January 1, 2020, Apple Co. purchased held-for-collection and sales bonds par value $2,000,000, 9%…

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Q: On January 1, 2020, Alaska Corporation purchased P1,000,000 10% bonds for P1,051,510 (including…

A: Solution: Cost of bond = P1,051,510 Market interest rate = 9% Stated rate = 10% Face value =…

Q: Stark Ltd sold IDR 6,200,000, 10%, 10-year bonds on January 1, 2019. The bonds were dated January i…

A: No. Date Account Titles and Explanation Debit Credit 1. January 1, 2019 Cash (IDR…

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Q: Clark Company issued $80,000 of 10-year, 7% bonds payable on January 1, 2024. Clark Company pays…

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Q: On January 1, 2020, Kevin Cosme acquired a P2,000,000, 10% bond for P2,159,708. The ongoing interest…

A:

Q: On January 1, 2020, Alaska Corporation purchased P1,000,000 10% bonds for P1,051,510 (including…

A: Fair Price of the bonds on December 31, 2020 = Present value of principal + Present value of…

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A: Since you have posted multiple questions, we can only provide the solution to the first question…

Q: On November 1, 2022, Dayrit Corporation purchased P800,000 face value, 10-year, 8% term bonds dated…

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Q: 1/2026 78,000 Rain Technology sold the bonds on July 14, 2027, for $81,000. Required: 1. Prepare…

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Q: On January 1, 2020, Sage Company purchased $270,000, 6% bonds of Aguirre Co. for $248,099. The bonds…

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Q: On January 3, 2024, Oriole Company acquires $410000 of Pharoah Company's 10-year, 10% bonds for…

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Q: nds on July n July 1, 2021

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Q: Ayayai Company issues $ 17300000, 9.80%, 20-year bonds to yield 10% on January 1,2025. Interest is…

A:

Q: Crane Company redeemed $178,000 face value, 17.5% bonds on June 30, 2022, at 98. The carrying value…

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Q: On January 1, 2020, Alaska Corporation purchased P1,000,000 10% bonds for P1,051,510 (including…

A: Interest paid=Value of bonds×10%=P 1,000,000×10%=P 100,000

Q: A company issues $15500000, 9.8%, 20-year bonds to yield 10% on January 1, 2022. Interest is paid on…

A: Bond :— It is one of the type of securities that pays fixed periodic interest and face value amount…

Q: Novak Corp. redeemed $148,000 face value, 12% bonds on April 30, 2022, at 102. The carrying value of…

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Q: On January 1, 2020, Merry Company issued its 9% P9,000,000 face value bonds, which matures on…

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Q: A company issues $17000000, 9.8%, 20-year bonds to yield 10% on January 1, 2024. Interest is paid on…

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Q: Flint Corporation sold $3,050,000, 6%, 5-year bonds on January 1, 2025. The bonds were dated January…

A: Step 1: Introduction to bonds payableBonds payable refers to a type of long-term debt that a company…

Q: On January 1, 2026, Baker Company purchased, as an investment, 5% bonds, having a maturity value of…

A: a) January 1, 2026 Debt investment a/c Dr     $138400               To cash a/c.…

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.