Temecula Inc. issued a five-year, $10,000 bond on January 1, 2020. The bond has a 6% stated rate of interest and pays interest annually on December 31. The market rate of interest on January 1, 2020 was 5%. Use the above information to complete the following bond proceeds table and journal entries. Determine the amount of cash received by Temecula on January 1, 2020 by completing the following bond proceeds table. (Round calculations to the nearest dollar.)   Item Amount P.V Factor n=5, i=5% P.V of Future Amount Principal $10,000     Cash interest payment $600   + P.V. of Bond ----- -----

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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.