On March 31, 2020, a calendar-year corporation sold 8% bonds with a face value of $6,000,000. These bonds mature in five years, and interest is paid annually on March 31. The bonds were sold for $5,536,000 to yield 10%. Using the effective interest method of computing interest, how much should be charged to interest expense in 2020?

Q: A company issues $15,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2020. Interest is paid…

A: Discount on bonds payable:The excess of par value over the carrying value of the bonds will be…

Q: LA Fitness Company issued a $10,000,000, 5-year, 7% callable bond on January 1, 2018, when the…

A: In the given question neither the face value of bond , nor the issue price of bond is given.…

Q: On January 1, 2021, Lyle’s Limeade issues 4%, 10-year bonds with a face amount of $90,000 for…

A:

Q: On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is…

A: Given: Par value of bonds: $200000 Rate of interest 6% Maturity year IS 10 Interest is paid annually…

Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…

A: Given: Face value= $5,000,000 i (Stated interest rate) = 14% n (Time period)= 10 x 2 = 20 Market…

Q: On January 1, 2019, Black Panther, Inc. issued P4,000,000 of 9% bonds, dated January 1 at 97.…

A: Determine Carrying amount of bonds payable Face value of bonds P4,000,000 Issued at 97% issued…

Q: Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued…

A: Here,FaceValue of Bond is $150,000Issued Value is 102% of Face Value, therefore, Current Value will…

Q: A company sold bonds on January 1, 2021, for $207,913. This price represents a market rate of 9% on…

A: Bonds sold at premium: When the bonds are sold at a price more than its face value then the excess…

Q: On January 1, 2023, Marigold Corporation purchased a newly issued $1,250,000 bond. The bond matured…

A: Bonds refer to the financial instrument issued by the bank or financial institution at a specified…

Q: On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value…

A: Bond is a financial instrument which can be issued at discount, at par or at premium depending on…

Q: Blossom Inc. issued $884,000 of 10-year, 3% bonds on January 1, 2024. Interest is to be paid…

A: A bond is a debt security, similar to an IOU. Borrowers issue bonds to raise money from investors…

Q: The interest expense on the income statement for the year ended December 31, 2021 is:

A: Bonds are a kind of financial instrument issued for raising cash by the entities for a perspective…

Q: On January 1, 2020, Everly Bottle Company sold $4,000,000 in long-term bonds. The bonds will mature…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: On January 1, 2024. Ithaca Corporation purchases Cortland Incorporated bonds that have a face value…

A: Bond is a debt security which is purchased to earn the fixed interest on the investment with low…

Q: On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of…

A: A bond is a fixed-interest bearer financial instrument that is issued by companies for raising…

Q: On June 1, 2024, Carla Vista Bottle Company sold $2,880,000 in long-term bonds for $2,526,064. The…

A: If you have any clarifications (i.e., expand the explanation) or want different, expanded, or…

Q: On January 1, 2021, a company issues $720,000 of 8% bonds, due in twelve years, with interest…

A: Amortization schedule      Formula sheet of the above schedule

Q: On June 30, 2021, Moran Corporation issued $13.0 million of its 8% bonds for $11.7 million. The…

A: Lets understand basics. When bond is issued for less than its face value then it is known to be…

Q: On January 1, 2022, Pipestone Corporation issued a five-year, $40,000, 7% bond. The interest is…

A: Lets understand the basics.Bond can be issued at either par value or at discount or at premium.…

Q: On July 1, 2023, DDJ Limited issued bonds with a face value of $900,000 due in 20 years, paying…

A: Bonds are issued below the face value than this is dicount and this is due to the higher interest in…

Q: On June 30, 2021, Moran Corporation issued $13.5 million of its 6% bonds for $12.1 million. The…

A:

Q: de, Inc. issued $758,000 of bonds on December 15, 2022, when the market rate of interest was 6%. The…

A: Here are the journal entries to record the issuance of the bonds on December 15, 2022, and the…

Q: Construct a bond amortization table for this problem to indicate the amount of interest expense and…

A: The bonds are the financial instruments for the business. The bonds are issued to raise money from…

Q: On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of…

A: The discount or premium on an issued bond is amortized to find the carrying value of the bond…

Q: On January 1, 2020, Sabond issued a 5-year 12%, P10,000,000. Interest is payable annually every…

A: Present Value of Bond = Present Value of Coupon Payments + Present Value of Redemption Value Present…

Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest…

A: Bonds Payable: Bonds Payable are the financial instruments that are issued with a promise or…

Q: A company issues $16700000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on…

A: A bond refers to the instrument which is issued by the government to borrow money when needed. It is…

Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 of 10% bonds, due on December 31, 2025.…

A: Interest expense = Previous period's Carrying amount of bonds * 8% * 6/12   Premium Amortization…

Q: On January 1, 2019, Company X issued $550,000 of twenty-year bonds when a market rate was 2%. The…

A: The carrying value of a bond refers to the face value plus any unamortized premium or minus any…

Q: On January 1, 2021, Lambda, Inc. issued ten-year bonds with a face value of $1,000,000 and an annual…

A: Bonds issued at discount: Bonds are said to be issued at discount if the issue price is less than…

Q: On June 1, 2024, Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds…

A: Bonds are a long-term liability that are issued for a fixed term. A periodic fixed interest is paid…

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.