On January 1, 2020, Pony Company acquired P5,000,000, 12% bonds to be held as finaNcial assets at amortized cost for P5,250,000 plus transaction cost of P124,000. Interest is payable annually on December 31. The bonds amture on January 1, 2025.  The effective interest method of amortization is used

Q: How much will be the gain (loss) on sale assuming all the bonds were sold on June 30,2020 at 99 plus…

A: Calculating carrying value of the bond on June 30, 2020. Year Beginning carrying value of bond…

Q: On January 1,2020, Jerry Conpany acquired P6,000,000 of 12% face value bonds at P5,650,500 to be…

A: Annual interest payment =face value of bonds x rate of interest x year = P6,000,000 x 12% x 1 year =…

Q: On April 1, 2019, Padayon Co. acquired a 5-year bond with a face value of P1,200,000 and stated…

A: Under ACM bo d should  be  measured  at fairvalue after adjusting  transaction costs

Q: On June 1, 2018, Ken Company sold $200,000 in long-term bonds for $175,520. The bonds have a stated…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds.

Q: Marin Co. sells $467,000 of 10% bonds on March 1, 2020. The bonds pay interest on September 1 and…

A:

Q: On January 1, 2024, Martin Company issued $5,000,000, 10% bonds.  Interest is payable semi-annually…

A: A financial table that shows the periodic payments and the distribution of principal and interest…

Q: 1. On July 1, 2019, Hello Corporation acquired an investment at amortized cost in Screen Company's…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A company issues $15100000, 9.8%, 20-year bonds to yield 10% on January 1, 2020. Interest is paid on…

A: It is the financial instrument issued by the company to raise the fund for business operations.…

Q: On December 31, 2019, Potter Corporation issued €2,000,000, 6%, 5-year bonds for €1,840,324. The…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.

Q: On April 1, 2020, BANANA Company purchased 9% bonds with a face value of ₱4,000,000 for ₱3,756,000…

A: Interest refers to the cost of money borrowed from a lender. It can be simple or compound. It is…

Q: Gordon Corporation issued $200,000 par value, 4%, 5 year bonds on January 1, 2019. The bonds mature…

A: 1. Calculation of present value of bond and interest Bond value= $ 200000 Time = 5years ( semi…

Q: Vaughn Company received proceeds of $206800 on 10-year, 6% bonds issued on January 1, 2020. The…

A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…

Q: At the beginning of January 2021, Luminiscence Company purchased ten-year bonds with a face amoun of…

A: The Purchase price of the bond = Present Value of Interest  + Present value of Bond at Maturity.…

Q: On January 1, 2020, EF company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields…

A: If face value of the bonds is less than the purchase price then such debt investments are purchased…

Q: On January 1, 2020, Andrea Company purchased bonds with face value of P8,000,000 for P7,679,000. The…

A: The amortization of bond is to be done in order to pay down the principal on debt regularly in…

Q: On January 1, 2019, PPP Company purchased as a long-term investment P5,000,000 face amount of SSS…

A: The interest method is an accounting technique that helps to amortize discounts or premiums on bond…

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

A:

Q: On 1 January 2021, Fortune Forever Limited (FF) purchased $500,000, 10% bonds with a maturity of 10…

A: Bonds: When an investor lends money to a borrower, the result is a fixed-income instrument called a…

Q: On January 1, 2020, ABC co. issued 3-year bonds with a face value of P1,200,000 and stated interest…

A: The provided information are: Face value = P1,200,000 Rate of interest (r) = 8% = 0.08 Yield = 10% =…

Q: On January 1, 2021, Jackie Company issued at 76 (gross of issuance costs of P46,260), 6% bonds which…

A: Working note: Computation of issue price of bonds, Discount, par value of bond:

Q: On June 1, 2019, Bramble Company sold $3,120,000 in long-term bonds for $2,736,600. The bonds will…

A: Amortization of bond: The process of allocation and reduction of the discount or premium on bonds to…

Q: Mcdonaugh Corporation issued $250,000 of 5%, 10-year bonds payable onJanuary 1, 2019. The market…

A: Bonds Payable: Bonds payable is a liability account that contains the amount owed to bondholders by…

Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 of 10% bonds, due on December 31, 2025.…

A: Interest expense = Previous period's Carrying amount of bonds * 8% * 6/12   Premium Amortization…

Q: On January 1, 2021, an investor paid OR291, 000 for bonds with a principal amount of OR300,000. The…

A: The interest income refers to the amount earned by the company on the amount lent aside from the…

Q: What is the initial cost of the debt investment?   2. What is the carrying amount of the debt…

A: Initial cost of the debt investment is the cost which has been paid by the company (which is OP…

Q: On January 1, 2019, Bota Company issued a 3-year bonds with a face value of P5,000,000 at 99. The…

A: The yield is the rate at which the present value of the coupons and the redemption amount is equal…

Q: On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid…

A: SOLUTION- Bonds refers to the financial instrument issued in the market to collect the funds.…

Q: 1.On January 1, 2020, Chespin Co. issued 3-year bonds with a face value of P1,200,000 and stated…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

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

A: Total discount on bonds issue = face value of bonds - issue value of bonds = P9,000,000 - P8,451,000…

Q: On July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000…

A: Market rate of interest = 10%/2 Market rate of interest = 5%

Q: a company issues 25,000,000, 7.8%, 20 year bonds to yield 8% on January 1, 2020. Interest is paid on…

A: Bonds are the securities issued by the entity for the purpose of raising funds from the market. It…

Q: On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable…

A: Definition:   Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by…

Q: Sheffield Corp. issues $6000000 face value of bonds at 96 on January 1, 2019. The bonds are dated…

A: The bonds may be issued at a discount when the interest offered by bonds is lower that the interest…

Q: On June 1, 2020, LM company purchased debt investment at amortized cost, 8,000 of P1,000 face value…

A: Investment in bonds: Investment in bonds is the scenario where the company acquires bonds either at…

Q: On July 1, 2019, YYY Company paid P1,198,000 of 10% 20-year bonds with a face amount of P1,000,000.…

A: Solution- Calculation of Carrying value:   Interest paid = 1,000,000*10%*6/12 = 50,000   Interest…

Q: On January 1, 2020, Joe Construction issued $350,000, 3-year bonds for $320,000. The stated rate of…

A: Face Value of the bonds issued = $350,000Issue Price of the bonds = $320,000Stated Interest Rate =…

Q: At the beginning of 2020, Sheridan Company issued 8% bonds with a face value of $3400000. These…

A: Date (A) Interest payment (B) 4% * face value  Interest expenses(C)  5%*pervious book value in G…

Q: Winrow Company received proceeds of $754,000 on 10-yea 8% bonds issued on January 1, 2019. The bonds…

A: A bondholder is someone who invests in or owns debt securities issued by corporations and…

Q: On July 1, 2026, ABC purchased 5,000 of the P1,000 face amount, 8% bonds to yield 10% per annum. The…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: On January 1, 2019, Rodgers Company purchased

A: If bond is purchased at the price blow its face value then it is called as…

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.