Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c)   Prepare the journal entry to record the recognition of fair value for 2021.

Q: On January 1, 2020, Pronghorn Company purchased 6% bonds, having a maturity value of $550,000 for…

A: Investment means an asset purchased in expectation of earning a return on such investment in future…

Q: On January 1, 2009, Zero Co. issued its 10% bonds in the face amount of P4,000,000, which mature on…

A: Formula: Adjusted unamortized bond premium at December 31, 2009 = Total bond premium - Amortization…

Q: On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000…

A: The bonds are issued or purchased either at discount or at a premium. The bond amortization table is…

Q: On January 1, 2019, Charlie Company. issued its 10 percent bonds in the face amount of P1,500,000.…

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

Q: On July 1, 2023, Riverbed Aggregates Ltd. purchased 6% bonds with a maturity value of $125,000 for…

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

Q: On January 1, 2019, X Sports Corporation issued 10% bonds with a face value of $200,000. The bonds…

A: Par value of bonds =$200000Issue price of bonds =$191000Discount on issuance of bonds…

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 January 1, 2014, Dubai Corporation purchased 12% bonds, having a maturity value of $600,000, for…

A: Bonds receivable: It is an investment in bonds of an organization which pays a fixed rate of…

Q: On January 1, 2025, Vaughn Company purchased 12% bonds having a maturity value of $320,000 for…

A: Recording of journal entry for above requirement are as follows

Q: (a) (b) (c) Prepare the journal entry at the date of the bond purchase. Prepare the journal entries…

A: Bonds represent debt securities utilized by governments, municipalities, or corporations to procure…

Q: On January 1, 2025, Tamarisk Company purchased 9% bonds having a maturity value of $330,000 for…

A: For the corporation, journal entries serves as an ongoing record of financial activities.  They are…

Q: On July 1, 2020, Martinez Corporation purchased at par 6% bonds having a maturity value of $350,000.…

A: Interest revenue = Debt investment x interest rate x no. of years = 350,000 x 6% x 1 = $21,000

Q: On January 1, 2020, Cheyenne Company purchased 4% bonds, having a maturity value of $420,000 for…

A: Journal entry is the procedure for initially documenting commercial transactions in the books of…

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: On January 1, 2017, Pearl Company purchased 12% bonds, having a maturity value of $284,000, for…

A: There are two methods of amortizing the premium or discount of bonds that are issued at a price…

Q: Metlock, Inc. issued $282,000, 7%, 15-year bonds on December 31, 2021, for $253,800. Interest is…

A: Total discount on bonds = Face value of bonds - issue value of bonds = 282000-253800 = $28,200

Q: On January 31, 2020, Courtenay Sports Cars issued 14-year, 7% bonds with a face value of $160,000.…

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

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: (a) Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places,…

A: Introduction: The effective interest technique is a standard for amortizing or discounting bonds.…

Q: On January 1, 2020, Bridgeport Company purchased 9% bonds having a maturity value of $290,000, for…

A: A bond amortization schedule is a table or spreadsheet that outlines the periodic payments and…

Q: On January 1,2019, ABC Corporation issued a 5-year, 12%, 1,000 of the P 5,000 face value bonds with…

A: Carrying value of the bonds as of December 31,2020 = Present value of principal + Present value of…

Q: On January 1, 2020, Oriole Company purchased 6% bonds, having a maturity value of $620,000 for…

A: Solution A Bond represents a loan to company or government in return of this company pay a fixed…

Q: On January 1, 2025, Swifty Company purchased 12% bonds having a maturity value of $312,000 for…

A: Investment means an asset purchased in expectation of earning a return on such investment in future…

Q: On January 1, 2020, Ayayai Company purchased 9% bonds having a maturity value of $250,000, for…

A: Bonds are debt securities issued by governments, municipalities, corporations, or other entities to…

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, 2024, NFB Visual Aids issued $900,000 of its 20-year, 6% bonds. The bonds were priced…

A: Journalizing is one of the most important and basic steps in the accounting cycle. Journalizing is…

Q: On January 1, 2020, Grouper Company purchased 12% bonds having a maturity value of $350,000, for…

A: The below journal entries are passed to show the treatment of interest revenue and premium…

Q: On January 1, 2020, Windsor Company purchased 10% bonds having a maturity value of $340,000, for…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: On January 1, 2020, Sunland Company purchased 8% bonds having a maturity value of $ 400,000, for…

A: The purchase of a bond as an investment is recorded at purchase price. The bond may be at a discount…

Q: On January 1, 2025, Teal Company sold 11% bonds having a maturity value of $400,000.00 for…

A: The objective of the question is to understand how to account for the sale of bonds at a premium and…

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 January 1, 2025, Indigo Company purchased 12% bonds having a maturity value of $310,000 for…

A: Unrealized gain means the value rise in asset value that has not yet been realized through sale or…

Q: On January 1, 2021, Concord Corporation issued its 10% bonds in the face amount of $8070000, which…

A: Step 1: Compute the amount of interest expense: Interest expense=$9152978*8%=$732238 Step 2: Compute…

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: On January 1, 2025, Entity D issued $1,000,000 of 7%, 5-year bonds at 98. The bonds pay interest…

A: Bonds Payable - Bonds Payable is a amount borrowed to be repayable at specific interval. It carries…

Q: sota and Lois Company purchased 12% bonds h 30. The bonds provide the bondholders with a nd mature…

A: The bonds have been purchased at a premium as the purchase value is greater than the maturity value.…

Q: On January 1, 2020, Teal Company purchased 9% bonds having a maturity value of $370,000, for…

A: Interest receivable = face value of investment x  interest rate = 370,000 x 9% = $33300

Q: On January 1, 2020, Sage Company purchased  11% bonds, having a maturity value of $ 301,000 for $…

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

Q: On July 1, 2019, Waterway Industries issued 11% bonds in the face amount of $12500000, which mature…

A: A bond discount is discount on bonds computed when the par value of bond exceeds the price on which…

Q: Instructions: 1. Prepare the journal entry at the date of the bond purchase. 2. Prepare the first 3…

A: Bond :—  A bond is loan from an investor to a borrower such as a company or government.  It's…

Q: 1. The carrying value of the bonds on December 31, 2020 is $ 2. The fair value of the bonds on…

A: Given in the question: Number of bonds issued 64 Face Value per bond $1,000…

Q: On December 1, 2017, Cone Company issued its 10%, $550,000 face value bonds for $640,000, plus…

A: Bond redemption is the process of repaying the principal amount of a bond to its bondholders upon…

Q: On January 1, 2021, Solis Co. issued its 10% bonds in the face amount of P3,000,000, which mature on…

A: Bonds are an obligation on an entity which is to be repaid on its maturity date. These are issued…

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.