On January 1, 2020, Metlock Company acquires $110,000 of Spiderman Products, Inc., 9% bonds at a price of $99,611. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Metlock Company a 13% yield. The bonds are classified as held-to-maturity.   Prepare the journal entry for the interest revenue and discount amortization under the straight-line method at December 31, 2021.

Q: How much will be the gain (loss) on sale assuming all the bonds were sold on June 30,2020 at 99 plus…

A: Calculating carrying value of the bond on June 30, 2020. Year Beginning carrying value of bond…

Q: January 1, 2020, Altaj Company acquires $400,000 of toothpaste Products, Inc., 9% bonds at a price…

A: Workings: Calculation of discount on amortization: Acquisition price = 350450 Bond value = 400000…

Q: On January 1,2020, Jerry Conpany acquired P6,000,000 of 12% face value bonds at P5,650,500 to be…

A: Annual interest payment =face value of bonds x rate of interest x year = P6,000,000 x 12% x 1 year =…

Q: On January 1, 2020, Hilichurl Company purchased 4,000 of P1,000 face value, 10% bonds of Ivory…

A: The effective interest rate uses the carrying amount of the bond to calculate interest income.…

Q: On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc.,  9% bonds at a…

A: No.  Account Titles & Explanation   Debit   Credit  (C)   Interest Receivable ($110,000 * 9%)…

Q: On January 1, 2019, CupCompany purchased NoodlesCorporation, 9% bonds with a face value of…

A: Unrealized gain (loss) reported in other comprehensive income for the year 2019: Unrealized gain…

Q: On December 31, 2019, Sumner Company held Wall Company bonds in its portfolio of trading securities.…

A: Trading securities: These are the securities purchased with the intention of disposing them within a…

Q: On January 1, 2019, AB Company purchased P1,000,000, 12% bonds of C Company for a price that yields…

A: Debt Investment: It is fixed-interest generating securities  to earn a steady interest income and…

Q: On January 2, 2020, Progresso Inc. purchased $150,000 of Cambells Corporation bonds at a discount of…

A: When the stated interest rate of the bond is less than the market interest rate then the bond is…

Q: On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation at a…

A: Bonds Payable = $10,000 * 3 bonds = $30,000 The calculation for Issue Price of bonds: The present…

Q: On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation to yield…

A: Face value of bond $30,000.00 Coupon rate 6% Effective interest rate 10.00% Years to maturity…

Q: On January 1, 2020, the Widner Company acquired 12% bonds with a face value of $350,000 and…

A: Bonds refer to the financial instrument issued in the market by the company for the cash borrowed.…

Q: On January 1, 2019, Ondoy Company purchased $1,000,000, 12% bonds of Pepeng Company for $1,063, 394,…

A: The carrying value of the investment, classified as an investment at fair value through profit or…

Q: effective-interest basis. Prepare the journal entry to record the interest payment and the…

A: Given that: On January 1, 2020, Swifty Company sold 11% bonds having a maturity value of $700,000…

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 2019 = P3,756,000 * 10% = P375,600 Interest received for 2019 = P4,000,000 * 9%…

Q: On January 1, 2019, Garfield AG made an investment in €70,000 of the 9%, 5-year bonds of Chester…

A: Journal entries          Date      Accounts and…

Q: On January 1, 2019, Apollo Corporation purchased 4-year P8,000,000, 10% bonds at face value. The…

A: The bond was sold on 31 December 2021, which means it had a one year remaining life before maturity.…

Q: On January 1, 2020, Metlock Company acquires $110,000 of Spiderman Products, Inc., 9% bonds at a…

A: The question is based on the concept of Financial Accounting.

Q: On January 1, 2020, Andrea Company purchased bonds with face value of P8,000,000 for P7,679,000. The…

A: The amortization of bond is to be done in order to pay down the principal on debt regularly in…

Q: On January 1, 2018, LAB Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held…

A: If a company buys a financial instrument for $150,000 that has a face amount of $200,000 and which…

Q: interest inco

A:

Q: uayside Limited acquired 6%, $ 100,000 (face value) bonds of Summerside Incorporated on January 1,…

A: Step 1 Journal is the Part of Book Keeping.

Q: January 1, 2020, an investor company acquires $249,000 of the investee company’s 4% bonds at a price…

A: The effective interest method is an accounting standard used to amortize, or discount a bond. This…

Q: On July 1, 2020, West Company purchased for cash, four $10,000 bonds of North Corporation at a…

A: Step 1 Bond is the long term sources of finance or investment having predetermined redemption value…

Q: On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc.,  9% bonds at a…

A:

Q: On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a…

A: Definition of interest revenue: Revenue received on lending the money is called interest revenue.…

Q: On July 1, 2020, Riverbed Company purchased $3,840,000 of Duggen Company’s 8% bonds, due on July 1,…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

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: On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a…

A: Given that the company follows straight line method of amortization, under this method discount on…

Q: On January 1, 2020, Kingbird Corporation purchased 325 of the $1,000 face value, 11%, 10-year bonds…

A: Issue price of the bonds = Present value of principal + Present value of interest payments where,…

Q: On January 1, 2020, Aspin Company purchased $1,200,000, 14% bonds of Bulldog Company for $1,381,934,…

A: If the financial asset is measured at amortized cost, on the subsequent reporting date, the…

Q: On January 1, 2019, Hyde Corporation purchased bonds with a face value of $300,000 for $308,373.53.…

A: A journal entry is used to document any commercial transaction in the accounting records of a…

Q: On January 1, 2020, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9% bonds at a…

A: The held-to-maturity debt investment account is classified as a long-term investment account. The…

Q: a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method.…

A: “Since you have posted a question with multiple subparts, we will be solving the first three…

Q: On January 1, 2020, RED Company purchased 12% bonds with face amount of ₱5,000,000 for ₱5,500,000…

A: The financial instrument is recognized at fair value and any changes in their fair value are…

Q: On July 1, 2020, West Company purchased for cash, ten $10,000 bonds of North Corporation at a market…

A: Bonds: These are the coupon-paying securities issued in the capital market by a company or the…

Q: At the beginning of the current year, Candice Company acquired bonds with face amount of P3,000,000…

A:

Q: On 1 January 2020, Maple Ltd. purchased $500,000 of Pine Ltd. 7% bonds. The bonds pay semi-annual…

A: A.             Given        Bond Value = $500000,   Coupon Rate =7% p.a.  , Yield Rate =…

Q: On January 1, 2019, Mark Corporation purchased bonds with a face value of $500,000 for $475,413.60.…

A: Prepare a schedule of bond investment interest income and discount amortization:   Date Cash…

Q: On January 1, 2026, ABC purchased serial bonds with face amount of P5M and stated interest at 12%.…

A: The market price of the bond is the price at which the market is purchased by the bondholders. The…

Q: On January 1, 2020, Hummer Company purchased 5% bonds, havinga maturity value of $500,000, for…

A: Bonds:   Bonds are debt instruments issued by the borrower company to its lenders. Bonds are issued…

Q: On January 2, 2020, Mark Company acquired, as a held-to-maturity investment, bonds with a face value…

A: A bond is borrowing security issued by the company by signing a bond agreement in which terms and…

Q: On January 1, 2021, All-Good Company purchased a bond with face amount of P3,000,000 for P2,500,000…

A: Discount on bonds purchased = Face value of bonds - price paid = 3000000 - 2500000 = P500,000

Q: On January 1, 2019, Ron Company purchased 12% bonds with face amount of P5,000,000 for P5,380,000…

A: Face value of bond=5,000,000  Rate of interest=12% Interest Income = Rate of Interest * Face Value…

Q: On January 1, 2021, Grana Inc. purchased 13%, P,500,000 face value bonds of Maldi Inc. at a price to…

A: Grana Inc. purchased 13% bond P 500,000 Yield = 10%  Duration = 5 years  Lets suppose par value bond…

Q: On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a…

A:

Q: On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc.,  9% bonds at a…

A: The question is based on the concept of Financial Accounting.

Q: On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $210,000.…

A: 1. The journal entry to record the purchase of the bonds: Formulation:

Q: On January 1, 2019, Tigreal company issued 5,000 of its 5-year, P1,000 face value, 11% bonds dated…

A: Carrying value of a bond refers to the net final value computed between the bond's face value adding…

Q: On January 1, 2020, RED Company purchased 12% bonds with face amount of ₱5,000,000 for ₱5,500,000…

A: On 01.01.2020, RED purchased bonds of 12% = P5500000 which includes the transaction cost. Face value…

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.