On January 1, 2024, White Water issues $540,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 6% and the bonds issued at $580,169. 2. If the market interest rate increases to 8% on December 31, 2026, it will cost $511,480 to retire the bonds. Record the retirement of the bonds on December 31, 2026. (If no entry is required for a particular transaction/event, select "No Journal, Entry Required" in the first account field. Round your final answers to the nearest whole dollar.)

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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.