On January 2, 2020, Mark Company acquired, as a held-to-maturity investment, bonds with a face value of $500,000 for $562,300. The bonds carry a stated interest rate of 12% and an effective yield of 10%. Interest is paid on June 30 and December 31, and the bonds mature on December 31, 2029. Required:   Prepare the journal entries necessary to record the purchase of the bonds and the first two semi-annual interest receipts using the straight-line method of amortization.

Q: On January 1, 2022, Kristopher Co. issued ten-year bonds with a face value of $6,000,000 and a…

A: The bonds are the financial instruments of the business. The bonds are reported as long term…

Q: Chowan Corporation issued $198,000 of 8% bonds dated January 1, 2019, for $191,470.07 on January 1,…

A: Discount on bonds payable is first calculated which is the difference of Bonds par value and the…

Q: On December 31, 2018 Brown Company issued $600,000 of 15-year, 11% bonds payable for $558,706,…

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

Q: On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation to yield…

A: Available for Sale (AFS): When investments are made in securities with an intention to make profit…

Q: On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation to yield…

A: Face value of bond $30,000.00 Coupon rate 6% Effective interest rate 10.00% Years to maturity…

Q: Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization…

A: 1. Below is the Journal Entry for the Purchase of the Bonds Date  Particulars   Debit   Credit…

Q: On January 1, 2025, Flounder Company purchased 8% bonds having a maturity value of $200,000 for…

A: Debt investment seems to be a sort of investment within a corporation or project that involves…

Q: On January 1, 2020, Pearl Company purchased at par 8% bonds having a maturity value of $270,000.…

A: Journal Entry: It involves keeping the records of all financial transactions of an entity. which…

Q: pany issues four-year bonds with a $105,000 par value on January 1, 2021, at a price of $100,950.…

A: Bonds are debt instruments which are issued to raise money from investors. Bonds may be issued at…

Q: On June 1, 2019, Swifty Company sold $2,460,000 in long-term bonds for $2,157,700. The bonds will…

A: Interest payment = $2,460,000*8% Interest payment = $196,800

Q: On June 30, 2020, Kingbird Company issued $3,120,000 face value of 15%, 20-year bonds at $3,824,160,…

A: Step 1: Introduction to Bonds Payable:Like other liability accounts, the bonds payable account has a…

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: On January 1, 2020, Metlock Company acquires $110,000 of Spiderman Products, Inc., 9% bonds at a…

A: The question is based on the concept of Financial Accounting.

Q: Valdez issues $450,000 of 13%, four-year bonds dated January 1, 2019, that pay interest semiannually…

A: Since there are multiple sub parts, the calculation will be given for first three sub parts. To get…

Q: On January 1, 2020, Ironman Steel issued $800,000, 8-year bonds for $861,000. The stated rate of…

A: Calculations:

Q: On December 31, 2018, White Company issued $400,000 of five-year, 12% bonds payable for $430,887,…

A: Premium on bonds = Issue value - Face value = $430,887 - $400,000 = $30,887

Q: On January 1, 2019, Lynch Company acquired 13% bonds with a face value of $50,000. The bonds pay…

A: Answer:-  Bond meaning:- An IOU-like debt security called a bond. Bonds are issued by the borrowers…

Q: On January 1, 2019, Salt Mine Corporation purchased at par 8% bonds having a maturity value of…

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

Q: On January 1, 2020, Ayayai Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a…

A: BondsThe financial or legal instrument that represents a loan taken by a person is called a bond.…

Q: Polk Incorporated issued $200,000 of 13% bonds on July 1, 2019, for $206,801.60. The bonds were…

A: The following computations are done for Polk Incorporation.

Q: On July 1, 2020, West Company purchased for cash, ten $10,000 bonds of North Corporation to yield…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: On January 1, 2020, Marin Company purchased at par 7% bonds having a maturity value of $370,000.…

A: Date Particulars Debit Credit a. Investment in 7% bonds $370,000     Cash   $370,000   (to…

Q: Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest…

A: Please note: Since you have posted a question with multiple sub-part, we will solve the first three…

Q: Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest…

A: Face value of bond = $ 1,900,000                             Issue price of bond = $ 1,641,812…

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.