On January 1, 2021, XYZ Corp issued 12% bonds dated January 1, 2021, with a face amount of $20 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.  Required:  1) Determine the price of the bonds at January 1, 2021. 2) Prepare the journal entry to record the bond issuance on January 1, 2021.  3) Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.

Q: On June 30, 2020, Ayayai Company issued $3,810,000 face value of 16%, 20-year bonds at $4,956,520, a…

A: Introduction: A journal entry is a recording of a business contract in the accounting system of a…

Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $1,400 million on…

A: The journal entries are prepared to keep the record of day to day transactions of the business. The…

Q: On February 1, 2018, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of…

A: Requirement 1: Date Account title and explanation Debit($) Credit($) February 1, 2018…

Q: On January 1, 2018, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds…

A: 1.

Q: The Bradford Company issued 10% bonds, dated January 1, with a face amount of $82 million on January…

A: Issue price of bonds would be the present value of the interest annuity & maturity amount at…

Q: Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,400,000 par value,…

A: When the bonds are issued at par, then there shall be no premium or discount on bonds payable.

Q: When Patey Pontoons issued 6% bonds on January 1, 2024, with a face amount of $600,000, the market…

A: Solution:The query involves a situation where Patey Pontoons releases bonds on January 1, 2024, with…

Q: On January 1, 2021, Loop Raceway issued 520 bonds, each with a face value of $1,000, a stated…

A: The bonds are the financial instruments for the business to raise money from the investors. The…

Q: On January 1, 2024, Instaform, Incorporated, issued 10% bonds with a face amount of $48 million,…

A: "Bonds" refer to debt securities that are typically issued by corporations, governments, or other…

Q: On January 1, 2021, GLITTER Company issued 10% bonds dated January 1, 2021 with a face amount of…

A: Solution a: Computation of bond price Table values are based on: n= 12     i= 7.00%…

Q: On January 1, 2020, Goodwill Company issued 10% bonds dated January 1, 2011, with a face amount of…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: On January 1, 2021, ABCompany issued 10% bonds dated January 1, 2021, with a face amount of $20…

A: 1. Determine the price of the bonds at January 1, 2021.

Q: Metlock, Inc. issued $282,000, 7%, 15-year bonds on December 31, 2021, for $253,800. Interest is…

A: Total discount on bonds = Face value of bonds - issue value of bonds = 282000-253800 = $28,200

Q: The Bradford Company issued 12% bonds, dated January 1, with a face amount of $86 million on January…

A: Bonds meaning:- Bonds are debt securities or financial instruments issued by governments,…

Q: On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face amount of $20…

A: Coupon rate = 10%Face amount = $20,000,000Yield = 12%Maturity = 20 yearsTo find: The amounts…

Q: On February 1, 2021, Cromley Motor Products issued 9% bonds, dated February 1, with a face amount of…

A:

Q: On January 1, 2018, Oman Cables Industry (SAOG) issued 12% bonds dated January 1, 2018, with a…

A: Bonds are the debts for the company issued to the investors at fixed rate of interest. There are…

Q: On January 1, 2021, Universe of Fun issues $900,000, 8% bonds that mature in 10 years. The market…

A: Bonds: This is just like debt for the issue of investors by the company. Bond is dependent on the…

Q: Claremont Inc. issued a $400,000 bond on January 1, 2020. The bond had a five-year life and an 8%…

A: A bond is an instrument of an indebtedness to the holders of bond issuer in finance. The most…

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: On January 1, 2018, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated…

A: 1.

Q: On January 1, 2018, Fort Industrial Corp. issued bonds with a face value of $1,000,000. The bonds…

A: Bonds are the instrument acknowledging debt due from one party to another party on specified future…

Q: The Gorman Group issued $860,000 of 9% bonds on June 30, 2021, for $945,110. The bonds were dated on…

A: We have the following information of the Gorman Group: 9% $860,000 bonds issued for $945,110…

Q: The Bradford Company issued 14% bonds, dated January 1, with a face amount of $89 million on January…

A: Bonds meaning:- Bonds are debt securities or financial instruments issued by governments,…

Q: Brussels Enterprises issues bonds at par dated January 1, 2021, that have a $2,500,000 par value,…

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

Q: When Patey Pontoons issued 10% bonds on January 1, 2024, with a face amount of $560,000, the market…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Universal Foods issued 10% bonds, dated January 1, with a face amount of $170 million on January 1,…

A: Answer:-  Journal entry:- The act of maintaining or creating records of any transactions, whether…

Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July…

A:

Q: When Patey Pontoons issued 4% bonds on January 1, 2024, with a face amount of $660,000, the market…

A: To determine the price of the bonds on January 1, 2024, we can use the present value formula for…

Q: Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual contract…

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

Q: Brussels Enterprises issues bonds at par dated January 1, 2021, that have a $2,600,000 par value,…

A: A bond payable is an instrument to raise finance from the market or from existing stockholders in…

Q: On January 1, 2018, Oman Cables Industry (SAOG) issued 12% bonds dated January 1, 2018, with a…

A: The present value represents the present value of the bond that will be redeemed in the future.…

Q: On January

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

Q: The Bradford Company issued 12% bonds, dated January 1, with a face amount of $92 million on January…

A: Bonds are a method of raising long-term funds by a business, wherein borrower company borrows a…

Q: On January 1, 2021, Loop Raceway issued 500 bonds, each with a face value of $1,000, a stated…

A: An early retirement of bonds is the process at which bonds are paid off before it reaches its…

Q: On December 31. 2020, Paulson company issues a 4-year bond with a par value of $100,000, a contract…

A: Bond issuance is an act in which bond securities are provided by the company in return for cash or…

Q: Myriad Solutions, Inc. issued 10% bonds, dated January 1, with a face amount of $320 million on…

A: Complete the table below to calculate the amounts related to the bonds that Myriad would report in…

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: When Patey Pontoons issued 8% bonds on January 1, 2024, with a face amount of $700,000, the market…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January…

A: 1.

Q: On January 1, 2024, Instaform, Incorporated, issued 14% bonds with a face amount of $50 million,…

A: "Bonds" refer to debt securities that are typically issued by corporations, governments, or other…

Q: Ike issues $180,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually…

A: “Hey, since there are multiple requirements posted, we will answer first three requirements. If you…

Q: Bombay Corporation issued 8% bonds on January 1, 2021, with a face value of $700,000, the market…

A: Bond price is determined by present worth of future cash flows from the bond. When the coupon rate…

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.