On July 1, 2021, Sarah Company issued 4,000 8% bonds payable with P1,000 face amount for P3,504,000. The bonds were issued to yield 10%. The bonds are dated July 1, 2021 and mature on July 1, 2030. Interest is payable semiannually on January 1 and July 1.   What is the carrying amount of the bond discount as of December 31, 2022?

Q: On Jan. 1, 2020, Eee Company issued 9% bonds in the amount of P 500,000, which mature on Jan. 1,…

A: Formula: Carrying value of bonds payable = Issue price of the bonds + Amortization of bond discount…

Q: On January 1, 2018, Quinton Corporation issued 8% bonds with a face value of $100,000. The bonds are…

A:

Q: On April 1, 2021, Cain Company issued at 105 plus accrued interest 4,000 of its 9%, P1,000 face…

A: Interest =Bonds issued×Face value×Rate of interest×312=4,000×P 1,000×9%×312=P 90,000

Q: On January 1st, 2020, Clem Company issued $300,000 of 10-year, 6% bonds on January 1, 2018. The…

A: Journal entries refers to the process of systematic documentation of the financial transactions of a…

Q: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1,…

A: Interest payment on June 30, 2021 = Face value of bonds x rate of interest x 6/12 = $70,000 x 7% x…

Q: Sweetwood Company issues $5,000,000, 10-year, 9% bonds at 96, with interest payable annually on…

A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…

Q: On March 1, 2021, FLAXSEED Inc. issued at 97, including accrued interest, 2,550 of its 10%, ₱1,000…

A: If the interest accrued from the previous due date of interest is included in the quoted price, then…

Q: On January 1, 2021, Green company issued P1,000,000, 12% bonds for P1,065,000, a price that yields…

A: Carrying value of the bonds payable is the value of the bonds on the books inculing the face value…

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1,…

A: Bonds issued at discount: When bonds are issued at price less than the face value then they are…

Q: On July 1, 2022, Mercurial Company issued at 98 plus accrued interest 2,500 of its 11%, P1,000 face…

A: Solution : Given Face value of bond         =P1000 Issue price                        =98%…

Q: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July…

A: Annual interest payment = Face value of bonds x rate of interest x 1 years = $500000 x 10% x 1 =…

Q: Logan Inc issued a $1,600,000, 6% 10 year bond at 88 on January 1, 2018. 1. Journalize the issuance…

A: Bonds are the debts of an issuing company that is repayable after a specific period of time, it may…

Q: On March 1, 2021 Lesley Company issued at 103 plus accrued interest 4,000 of 9% P1,000 face value…

A: Solution: Accrued interest on Bond = 4,000*P1,000*9%*2/12 = P60,000 Proceed from issue of bond =…

Q: On May 1, 2021, Ligertwood Co. issued P5,000,000, 10%, three-year bonds to yield 8%. The bonds pay…

A: Bond is a debt security which carries a fixed interest rate. The fixed interest rate is known as…

Q: On November 1, 2021, Mason Company issued P4,000,000 of 10-year, 8% term bonds dated October 1,…

A: The accrued interest is the current liabilities for the business, which is due for payment but not…

Q: On January 1, 2021, Bicol Company issued 5-year bonds with face value of P 10,000,000 at 95. The…

A: Working notes :-…

Q: On August 1, 2021, Space Company issued at 97 plus accrued interest, 2,500 of its 12%, P1,000 bonds.…

A: Formula: Cash received on the issue of bonds= Face value of bond x Issue rate of bonds.

Q: On March 1, 2021, JebaMac Company issued 6% term bonds with a face amount of P1,000,000 due March 1,…

A: Jeba Company has recognized the bond payable as per amortized cost method using the effective…

Q: On January 1, 2018, Lane Unlimited issues a 9%, 10- year bonds payable with a face value of…

A: Total premium on bonds = Issue value - Face value = $240,000 x 105/100 - $240,000 = $12,000

Q: Golden Inc. issues $4,000,000, 5-year, 10% bonds at 102, with interest payable annually on January…

A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…

Q: Using effective interest method, what amount of the bond discount should be amortized for the six…

A: Bonds:   Bonds are the financial debt instruments issued by the corporations to raise capital for…

Q: A. July 1, 2020: entry to record issuing the bonds. B. June 30, 2021: entry to record payment of…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on…

A: Solution: Face value of bond = P5,000,000 Issue price of bond = P4,695,000

Q: Novak corp. Issued $417,000,11% 15 year bonds on december  31,2021 for $404,490.interest  is payable…

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

Q: On January 1, 2021, Gibson Company issues $5,000,000 of 10 year bonds at an issuance price of 98.…

A: The bonds are issued at discount when market rate is higher than the stated rate of bonds payable.

Q: The following section is taken from Bramble Corp.’s balance sheet at December 31, 2021. Current…

A: Accrual of interest on December 31, 2022 = Face value of bonds x rate of interest x period =…

Q: On April 1, 2019, Ellison Co. issued 4-year, 7%, $100,000 face value bonds. The bonds were issued at…

A:

Q: On July 1, 2019, Pen Co. issued 4,000 of its 8%, P1,000 face value bonds payable for P3,504,000. The…

A: Introduction: Bonds discount: When bonds are issued at less than its face value called bonds…

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.