On January 1, 2024, for $17.2 million, Cenotaph Company purchased 8% bonds, dated January 1, 2024, with a face amount of $19.2 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: Prepare the journal entry to record interest on June 30, 2024, using the effective interest method. Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.

Q: Important Factors to Consider When Building a TCO Model Example of a TCO Model?

A: TCO model or Total Cost Ownership Model is an model used to estimate the cost of product or a…

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A: Investors select a market index (or a mix of indices) as the portfolio's benchmark. An index…

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Q: What is the Baumol model, and how is it used?

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Q: Explain Replacement-Analysis Fundamentals?

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A: Scenario means a situation or circumstance which is influenced by various factors. Various if and…

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.