Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Preparing an amortization schedule and recording mortgages payable entries Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425,000, and land, $125,000) on January 1, 2018. Kellerman signed a 20-ycar, 6% mortgage payable. Kellerman will make monthly payments of $3,940.37. Round to two decimal places. Explanations are not required for journal entries. Requirements Journalize the mortgage payable issuance on January 1, 2018. Prepare an amortization schedule for the first two payments.

Q: Garland Company received proceeds of $131600 on 10-year, 6% bonds issued on January 1, 2018. The…

A: Carrying value of a bond is the value of bond on a given date after deducting the discount and…

Q: On January 1, 2020, Blossom Company purchased $310,000, 6% bonds of Aguirre Co. for $284,855. The…

A: Under the effective interest method of amortization of discount or premium, the difference between…

Q: In order to fulfill its financing activities, Astro Co. issued Rp 505.000,000, 12%, 10-year bonds…

A: Bond Discount Amortization: If bond’s coupon rate is less than  rate of return expected in the…

Q: On April 1, 2019, Padayon Co. acquired a 5-year bond with a face value of P1,200,000 and stated…

A: Under ACM bo d should  be  measured  at fairvalue after adjusting  transaction costs

Q: On January 1, 2018, West Company purchased $600,000 of 6%, 5-year bonds, as an available-for-sale…

A: Following is the given information:

Q: Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization…

A: 1. Below is the Journal Entry for the Purchase of the Bonds Date  Particulars   Debit   Credit…

Q: Stark Ltd sold IDR 6,200,000, 10%, 10-year bonds on January 1, 2019. The bonds were dated January i…

A: No. Date Account Titles and Explanation Debit Credit 1. January 1, 2019 Cash (IDR…

Q: On January 2,2019, Silver Company invested in a 4-year 10% bond with a face value of $3,000,000 in…

A: Face value=$3,000,000 Coupon rate=10% Bond value at the time of sale, when interest rate=12%…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Long-Term Notes Payable Long-term notes payable refers to the obligation of the company in the form…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: The present value (PV) of bond the sum of the present value of interest and the PV of the maturity…

Q: On March 1, 2026, ABC purchased a 12% P3M face amount of bond, issue for P2,700,000 excluding…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Presented here is a partial amortization schedule for Waterway Industries who sold $102000, five…

A: PLEASE GIVE A LIKE, your response matters  Correct option is (A) = $10200  Par value of bonds =…

Q: On January 1, 2021, Panama Company purchased bonds for yield 5,000,000 face amount 4,562,000 to be…

A: Amortization is an accounting method used to periodically decrease the book value of a debt or…

Q: Journal entry to record the second period of interest, June 30,  Matrix would record a credit to…

A: Given information is: On January 1, 2019, Matrix, Inc. purchased as an investment OMR 22,000, of 9%,…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Effective-interest amortization method:Effective-interest amortization method it is an amortization…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Discount on bonds payable: This is the value that arises when the bonds are sold at a price less…

Q: Wendy Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2019. The…

A: Annual interest payment = face value of bonds x rate of interest x yaer = $200000 x 6% x 1 = $12000

Q: On January 1, 2020, Garland Company purchased bonds with a face amount of P8,000,000 for P7,679,000…

A: Investment is recognized at fair value and that value of the investment is increased by the interest…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: 1.

Q: On January 1,2019, DEF Company purchased 456B Corporation, 9% bonds with a face value of P 4,000,000…

A: Interest revenue for the year 2019 = Bond investment * Effective interest rate

Q: On January 1, 2020, HIBISCUS Company purchased 4,000 of ₱1,000 face value, 10% bonds of IXORA…

A: The current price of a bond is the total value for which a bondholder will be able to purchase the…

Q: On January 1,2019, DELO Company purchased 456B Corporation, 9% bonds with a face value of P4,000,000…

A: Interest revenue is the amount of interest that an entity might have earned during a period.

Q: n March 1, 2026, ABC purchased a 12% P3M face amount of bond, issue for P2,700,000 excluding accrued…

A: Answer: Bonds are the debt instruments issued by the company to the general public to raise funds…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Classified balance sheet: This is the financial statement of a company which shows the grouping of…

Q: Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2018. The…

A: Total discount = Face value of bonds - Proceeds from bonds = $200000 - 188500 = $11,500 Straight…

Q: On March 1, 2026, ABC purchased a 12% P3M face amount of bond, issue for P2,700,000 excluding…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Presented here is a partial amortization schedule for Marigold Corp. who sold $164000, six year 10%…

A: Given, Face value = $164,000 Issue price = $170,000   Premium on bonds payable = $170,000 - $164,000…

Q: Dahlia Company purchased a P2,000,000 12% face value bonds, 10 years, on April 1, 2019 for…

A: Amortization on bonds is the the matching the carrying value of bonds to the maturity of the bonds.…

Q: On January 1, 2021, for $18 million, Monument Company purchased 10 year, 10% bonds, dated January 1,…

A: Semiannually interest receipt = Face value of bonds x rate of interest x 6/12 months = $20,000,000 x…

Q: On June 1, 2020, LM company purchased debt investment at amortized cost, 8,000 of P1,000 face value…

A: Investment in bonds: Investment in bonds is the scenario where the company acquires bonds either at…

Q: On January 1, 2019, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79,…

A: Answer 1:

Q: On January 1, 2021, PAPASA BA AKO Company purchased 5-year bonds with face value of P8,000,000 and…

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

Q: On July 1, 2018, ABC Co. issued S6,000,000, 6%, 4-year bonds. The bonds were sold to yield an…

A: Journal: It is the first step of recording financial transactions. It is used to prepare the…

Q: Wendy Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2019. The…

A: The bonds are issued by company at discount if bonds market price is higher than stated rate of…

Q: Mercer Corporation acquired $400,000 of Park Company’s bonds on June 30, 2018, for $409,991.12. The…

A: Solution: - Calculation of premium on bonds as follows under:-

Q: What is the carrying amount of the bond investment on December 31, 2021? ( round off final answer)

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

Q: Freddy Corporation purchased $1,500,000, 8%, five year bonds on January 1, 2018. Interest is payable…

A: Journal entries to be passed for bonds held as available for sale securities

Q: Wildhorse Co. received proceeds of $724000 on 10-year, 8% bonds issued on January 1, 2019. The bonds…

A: Interest: The money charged by the lender for using lender’s funds is referred to as interest. So,…

Q: loyd Limited had the following transactions pertaining to debt investments. Jan.  1, 2020 Purchased…

A: Interest  = Bond x Interest rate x Time

Q: On June 30, 2020 Porter Company issues 11%, five-year bonds payable with a face value of $120,000.…

A: Semiannual interest payment = Face value of bonds x rate of interest x 6/12 = $120,000 x 11% x 6/12…

Q: On January 1, 2019, Rodgers Company purchased $400,000 face value, 10%, 3-year bonds for…

A: Bond is borrowing security that is issued by the company to raise funds from the market by making an…

Q: On January 1, 2019, Kelly Corporation acquired bonds with a face value of $400,000 for $386,808.18,…

A: Part 1 Discount  on Investment = Face Value -  Issue Price          =400000 - 386808.18…

Q: On January 1, 2020, Splish Company purchased $300,000, 6% bonds of Cabana Co. for $313,128. The…

A: Journal entry - It refers to the process where the business transactions are recorded in the books…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Mortgage PayableMortgages payable is referred to the long-term debts owed by the business that are…

Q: Holly Industries, Inc. issued P6,000,000 of 8% debentures on May 1, 2019 and received cash totaling…

A: When the effects of compounding over time are taken into account, the effective annual interest…

Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…

A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money…

Q: Required: Prepare an amortization table.

A: Effective interest method of bond valuation is an approach to determine the value of a discounted…

Q: VICO Company had outstanding a 7%, 10-year bond payable with face amount of P5, 000, 000. The bond…

A: Interest expense for 2019 = Carrying value of bonds x yield rate x no. of months/12 = P5,250,000 x…

Q: On January 1, 2018, West Company purchased $600,000 of 6%, 5-year bonds, as an available-for-sale…

A: Bond is a debt insturment, which are issued to raise fund for the business. Bond is an interest…

Q: On June 1, 2019, YODA CORP. acquired a 5-year, 10%, P1,00 value bonds at 92. The company paid…

A: Interest revenue refers to the earnings which the entity makes from the investments or on the debts…

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.