Sarah Johnson purchased a 20-year Corporate bond two years ago at its face value of $5,000. The bond paid 4.75% annual interest. Two years later, she sold the bond for $5,125. a. What is the annual interest amount for the bond? b. What is the total interest Ms. Johnson earned during the two-year period? c. What was her total return including capital gains?
Sarah Johnson purchased a 20-year Corporate bond two years ago at its face value of $5,000. The bond paid 4.75% annual interest. Two years later, she sold the bond for $5,125. a. What is the annual interest amount for the bond? b. What is the total interest Ms. Johnson earned during the two-year period? c. What was her total return including capital gains?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions
Section: Chapter Questions
Problem 2CE
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Transcribed Image Text:Sarah Johnson purchased a 20-year Corporate bond two
years ago at its face value of $5,000. The bond paid 4.75%
annual interest. Two years later, she sold the bond for
$5,125.
a. What is the annual interest amount for the bond?
b. What is the total interest Ms. Johnson earned during
the two-year period?
c. What was her total return including capital gains?
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