Were the bonds purchased at a discount or premium? AnswerDiscountPremium b. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note:Round each amount entered into the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Date Stated Market Premium Bond

Q: On April 1, 2020, Lucky Corp. purchased P1,000,000 face amount 12% bonds at 94. Bonds pay interest…

A: Bonds represent the loan for the company on which a percentage of interest has to be paid by the…

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On January 1, 2020, Baker Corp.…

A: Bond Amortization  Effective Rate of Interest Method - Effective Rate of Interest Method is used to…

Q: Mitchell Inc. issued 240, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest…

A: Bond Amortization: When bonds are issued at a price less than the face value, it is called bonds…

Q: Vadercat Limited issued $30 million 4.5 percent, 15 year bonds on September 1, 2020. The market rate…

A: Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: On June 1. 2020. Mitchell Inc. issued 100, 8%, $1,000 bonds dated June 1, 2020 for $108,530. The…

A: The face value of a bond is 100000 and it is issued at 108530. The premium on the issue of bond is…

Q: On January 1, 2019, Calvert Company issues 12%, $100,000 face value bonds for $103,545.91, a price…

A: Solution: Introduction: A bond is an instrument of financial indebtedness of a bond issuer where a…

Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…

A: Given: Face value= $5,000,000 i (Stated interest rate) = 14% n (Time period)= 10 x 2 = 20 Market…

Q: On June 1, 2018, Ken Company sold $200,000 in long-term bonds for $175,520. The bonds have a stated…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds.

Q: On January 1, 2019, Learned Inc. issued $105 million face amount of 20-year, 14% stated rate bonds…

A: Proceeds (Issue price) of bonds=Present value of semiannual interest payment+Present value of…

Q: Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2.…

A: Under the Straight line method, a Bond premium or discount is amortized equally over the bond term…

Q: On January 1, 2019, REP Company purchased serial bonds with face amount of P5,000,000 and stated…

A: Total no. of installments = Total face amount / annual installment = P5,000,000 / 1,250,000  = 4

Q: On January 1, 2019, company acquired 2,000,000 face amound bonds dated January 1, 2022. The bonds…

A: Introduction' Bond is a investment securities that is issued by company where investors lends money…

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On July 1, 2020, West…

A: HTM Securities: When investments are made in securities with an intent to held until the maturity,…

Q: View Policies Show Attempt History Current Attempt in Progress On January 1, 2020, Teal Company sold…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds.

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On July 1, 2020, West Company…

A: Amortization of Discounts on Bonds Payable: When a bond is sold at a discount, the amount of the…

Q: On January 1, 2020, Pearl Company purchased at par 8% bonds having a maturity value of $270,000.…

A: Journal Entry: It involves keeping the records of all financial transactions of an entity. which…

Q: Selected transactions on the books of Ayayai Corporation follow: May 1, 2020   Bonds payable with a…

A: Working note: Computation of premium on bonds payable and accrued interest on May 1, 2020:

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

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

Q: Recording Bond Entries and Preparing an Amortization Schedule—Effective Interest Method, Premium…

A: Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise…

Q: Ligeville Ltd purchased 6%, 5-year bonds newly issued on January 1, 2020 for $676,452.24 having a…

A: Bonds are the debt security which is issued by corporates or the governments to collect the funds.…

Q: PECAN Company issued ₱10,000,000 face value bonds at 95 plus accrued interest on March 1, 2021.…

A: Accrued Interest on bond = ₱10,000,000 × 12% × 4 months12 months  = ₱400,000  Number of bonds =…

Q: Determining the Proceeds from Bond Issues Madison Corporation is authorized to issue $760,000 of…

A: The bonds are issued at premium if market interest is lower than the stated interest of bonds and…

Q: Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2020. The bonds were dated…

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

Q: Crane Company sells 8% bonds having a maturity value of $1,420,000 for $1,312,340. The bonds are…

A: Effective interest rate: It can be defined as the interest rate on borrowings or on any financial…

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On January 1, 2020, Baker…

A: Effective interest method: In amortizing bonds, effective method is used where there is a market…

Q: Determining the Proceeds from Bond Issues Madison Corporation is authorized to issue $400,000 of…

A: The proceeds from bonds will be calculated by discounting the interest to be paid for 7 years and…

Q: On January 1, 2019, Calvert Company issues 10%, $200,000 face value bonds for $207,259.79, a price…

A: journal entry is the act of keeping or making records of any transactions that is listed on the…

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A: Journal entry: It is prepared to record the financial and non financial transaction of the business…

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A: On 01.01.2020, Halo Limited purchased 10% bonds = $900000 against debt investment. Purchased bonds =…

Q: On January 1, 2020, Windsor Company purchased 10% bonds having a maturity value of $340,000, for…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Whispering Company sells 10% bonds having a maturity value of $1,410,000 for $1,308,350. The bonds…

A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…

Q: Recording the Refunding of Long-Term Debt On January 1, 2020, Rocket Corporation issued $100,000 of…

A: Introduction: A journal entry is a business transaction that is recorded in a company's accounting…

Q: On January 1, 2019, Calvert Company issues 10%, $100,000 face value bonds for $103,629.90, a price…

A: Definition:

Q: Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds…

A: Bonds payable is a long-term liability in which the bonds has been issued in lieu of amount borrowed…

Q: Oriole Company sold $3,250,000, 9%, 10-year bonds on January 1, 2022. The bonds were dated January…

A: Bonds are the instrument used in financial market as a debt instrument to borrow the fund from the…

Q: Lord Corporation acquired bonds with a face value of P3,000,000 for P2,800,000 on January 1, 2020.…

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

Q: Madison Corporation is authorized to issue $500,000 of 5-year bonds dated June 30, 2019, with a…

A: Bonds are the securities issued by an entity in order to raise funds. It is like a debt over the…

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On July 1, 2020, West Company…

A: Journal entries refers to the systematic documentation of the financial transactions of a company in…

Q: On May 1, 2018, ABC Corporation purchased $1,500,000 of 12% bonds, interest payable on January 1 and…

A: A bond is an instrument of raising funds. It has a fixed interest rate which is the paid by the…

Q: On January 1, 2020, Flint Company purchased at par 6% bonds having a maturity value of $340,000.…

A: Journal entries refer to the recording of transactions in an appropriate way. Journal entries help…

Q: Current Attempt in Progress On January 1, 2020, Teal Company sold 11% bonds having a maturity value…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: Determining the Proceeds from Bond Issues Madison Corporation is authorized to issue $400,000 of…

A: Introduction: The bonds to yield % is the amount of return the bonds will payback on maturity. The…

Q: Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: On January 1, 2020, Baker Corp. purchased $16,000 of Chocolate Inc. bonds. These bonds pay 5%…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…

A:

Q: Recording Entries for HTM Debt Securities— Effective Interest Method On July 1, 2020, West Company…

A: Income statements refers to those financial statements that shows the profitability of a business…

Q: journal entries (Straight-line amortization) ABC Incorporated issued bonds to DEF Corporation on…

A: Bonds: Bonds can be defined as the debt securities issued for raising capital. Bond holder is…

Q: Bramble Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are…

A: Bond Amortization is similar amortization of loan which is prepared to determine the actual interest…

Q: On January 1, 2017, Natifah Inc. acquires $500,000 of 8% bonds at a price of $552,970. The interest…

A: (2A)3 year amortization schedule Date.  Cash.         Interest.      Amor-.      Carrying 31/12…

Q: Accounting Wildhorse Co. sells $462,000 of 10% bonds on March 1, 2020. The bonds pay interest on…

A: Given, Market rate for semi-annual interest payments=12%2=6%Term of bonds=3.5 years×2=7 terms

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.