On January 1, 20x1, an entity issued a noninterest-bearing note of P1,200,000 in exchange for land. The note is due in three equal annual installments every December 31. The effective interest rate is 17%. Requirements Provide all the entries during the term of the note. Compute for the current and non current portions of the note on December 31, 20x1 and the amount of “Discount on notes payable” allocated to each portion.

Q: 1. Costco Wholesale Corporation borrows $640,000 on September 1, 2021. Costco signs a nine- month,…

A: Formula: Interest amount = Notes payable amount x Time period x Interest rate.

Q: On November 12, 2021, Jones Corporation borrows money at James National Bank by issuing a $10,000, 3…

A: Effective annual interest rate = Interest / ( Proceeds x Time ) Given that: Discounted = 12% Basis…

Q: On 1/1/X1, Caldwell Corp. borrowed $450,000 by agreeing to a 9%, 9-year installment note with the…

A: Note means an instrument acknowledging as debt due from one party to another party. Interest bearing…

Q: On December 31, 2022, the lender on a $5,400, 120-day, 12% note dated November 5, 2022, will…

A: The interest receivable is the amount of revenue which is earned but not received yet.  It is…

Q: The Irby Firm loaned Soltis Inc. $147,812. The Irby Firm accepted Soltis Inc's. 3 - year $ 186, 200,…

A: Zero-interest-bearing notes receivable refer to promissory notes or debt instruments that do not…

Q: On October 12, 2020, Golf Co. received from one of its customers, Ping Co., a $30,500, 8% 90 day…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: A 180-day promissory note was issued by FDNACCT Co. on November 1, 2021 in exchange of goods bought…

A: Interest income is the amount of money received as an interest either from an investment, bonds, or…

Q: On October 1, 2025, Concord, Inc. assigns $1,263,100 of its accounts receivable to Marigold National…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: On November 1, 2021, Ayayai Corp, which uses a calendar year as its fiscal year, signs a $28200, 8%,…

A: Journal entry is the act of keeping records of transactions in an accounting journal. An accounting…

Q: On April 1, 2025, Marigold Company assigns $505,300 of its accounts receivable to the Third National…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: On September 1, 2022, Accounts receivable in the amount of $900,000 were assigned as collateral to…

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

Q: Lang Warehouses borrowed $178,960 from a bank and signed a note requiring 8 annual payments of…

A: Amount borrowed = $178,960Annual payments = $28,819No. of annual payments = 8

Q: Headland Corporation issued a 5-year, $65,000, zero-interest-bearing note to Brown Company on…

A: Note payable: It implies to a written promissory note issued by lender to the borrower against the…

Q: On January 1, 2018, the Merit Group issued to its bank a $41 million, five-year installment note to…

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and…

Q: On January 1, Amil Corp. lent $37,000 to Windsor Ltd., accepting Windsor's $49,247, three-year,…

A: Zero interest-bearing note refers to a note that does not pay interest like a normal note. The…

Q: Headland Corporation issued a 5-year, $65,000, zero-interest-bearing note to Brown Company on…

A: Zero interest notes: The notes payable which are not issued with an interest rate are known as…

Q: The following selected transactions relate to liabilities of United Insulation Corporation. United’s…

A: Journal Entry :— It is an act of recording transaction in books of account when transaction…

Q: December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign…

A: Journal is the book of original entry in which all the financial transactions of the business are…

Q: A 180-day promissory note was issued by FDNACCT Co. on November 1, 2021 in exchange of goods bought…

A: Interest receivable=Face value of the note×Interest rate×Term of the note

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.