On Aug 31, 20X1, ABC Corp received a P2,000,000 12% 4-year note from a customer. Note is collectible in 4 equal annual  installments every Sept 1 , including the interest. On Dec 31, 20X1 ABC recorded an accrued interest of P80,000. If NO reversing entries are made at Jan 1, 20X2, the adjusting entry to record the accrued interest at Dec 31, 20X2 will include:     Cr Interest Income 60,000 Dr Interest Income 20,000 Dr Interest Receivable 20,000 Cr Interest Receivable 60,000

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Q: How did you calculate the all items excluding interest?

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A:

Q: How did you get to the 65,000? What number do you add or subtract?

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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.