On March 1, 2020, Sandollar Inc. issued $90,000 of bonds at 105, paying 8% cash interest semiannually on June 30 and December 31. The bonds are scheduled to mature December 31, 2023. On September 1, 2020, $10,000 of the bonds were retired when the bonds were selling at 89. Assume the straight-line interest method is used to amortize bond discounts and premiums.  Required  a. Provide the entry for the bond issuance on March 1, 2020.  b. Provide the entry for the interest payment on June 30, 2020.  c. Provide the entry to recognize interest expense for the portion of the bond issue retired on September 1, 2020.  d. Provide the entry to record the bond retirement on September 1, 2020.

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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.