Required information [The following information applies to the questions displayed below.] On January 1, 2024, Splash City Issues $500,000 of 9% bonds, due In 20 years, with Interest payable semiannually on June 30 and December 31 each year. Assuming the market Interest rate on the issue date is 10%, the bonds will issue at $457,102. 2. How will the bond Issuance on January 1, 2024, affect the financial statements? 3. How will the first two semiannual Interest payments on June 30, 2024, and December 31, 2024, affect the financial statements? Complete this question by entering your answers in the tabs below. Req 2 Req 3A Assets Req 38 How will the bond issuance on January 1, 2024, affect the financial statements? Note: Amounts to be deducted should be indicated by a minus sign. Balance Sheet Liabilities Stockholders' Equity Retained Earnings Common Stock < Reg 2 Revenues Req 3A > Income Statement Expenses Net Income

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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.