Shopee Company was authorized to issue a 5-year, 10%, P5,000,000 bonds dated June 30, 2020. Interest is payable semi-annually on June 30 and December 31. (The company uses the effective interest method of amortization). Assuming the bonds were sold to yield: a.) at 8% b.) at 12% Required: a. Determine the issue price of the bonds. b. Prepare the amortization table for the entire life of the bonds c. Prepare the entries relating to the bonds for the year 2020 and 2021.

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

A: Introduction Bonds issued with discount: Bonds are financial instrument which represents company’s…

Q: n December 1,2018, the Emerald Corporation issued five-year, non-convertible P 5,000,000 face value…

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

Q: On January 1,2019, ABC Corporation issued a 5-year, 12%, 1,000 of the P 5,000 face value bonds with…

A: market value of bond= present value of future payments@YTM

Q: On January 1, 2018, Reese Incorporated issued bonds with a face value of $140,000, a stated rate of…

A:

Q: On January 1, 2018, Tantor Inc. issued $20,000,000 worth of face value bonds, which pay interest…

A: Market Price of the bonds = Present value of principal + Present value of interest payments = face…

Q: On December 31, 2020, Plank Corporation issued $800,000, 6%, 5-year bonds for $735,100. The bonds…

A: PREPARATION OF BOND DISCOUNT SCHEDULE

Q: On January 1, 2020, Fergus Corporation issued $800,000, 10%, 5-year bonds. The bond interest is…

A: SOLUTION INTEREST EXPENSE TO BE RECOGNIZED FOR 6 MONTHS = BONDS BOOK VALUE AT THE BEGINNING OF THE…

Q: f each year. Aumont Company allocates interest and unamortized discount or premium on the…

A: c.   journal entry to record the interest payment and the amortization for 2017 Date Account…

Q: On January 1, 2018, Reese Incorporated issued bonds with a face value of $120,000, a stated rate of…

A:

Q: On January 1, 2021, Crane Ltd. issued $640,000 of 5%, 5-year bonds. The bonds were issued to yield a…

A: The process of recording financial activity for the first time in the books of accounts is known as…

Q: On January 2, 2015, Sandhill Corporation issued $1.050,000 of 10% bonds at 97 due December 31, 2024.…

A: Issue Price of face amount of $630000 ($630000 * 97%) $6,11,100 Discount on Bonds Payable ($630000…

Q: On May 31, 2020, VIOLET Company issued 6% bonds with face amount of ₱4,000,000 for net proceeds of…

A: Interest payment on December 31, 2020 = Face value of bonds x rate of interest x no. of months/12 =…

Q: On January 1, 2020, Teal Company sold 11% bonds having a maturity value of $500.000 for $ 518.953,…

A: Annual interest payment = Face value of bonds x rate of interest x no. of months/12 = $500,000 x 11%…

Q: On January 1, 2021, Luyang Company issued 3-year bonds with face amount of P5,000,000 at 98.…

A: Bonds payable is a liability account that holds the amount that the issuer owes to bondholders.…

Q: Olay Inc. issues $160,000, 8%, 10-year bonds payable on January 1, 2020. Calculate the selling price…

A: a. Compute the S.P. (selling price) of bonds at 10% as follows:

Q: Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted…

A: The financial transactions are initially recorded in the form of a journal entries.

Q: DEF Company was authorized to issue 12%, 10-year bond with face amount of P20,000,000 on January 1,…

A:

Q: On December 31, 2019, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of…

A: Introduction Bonds issued with discount: Bonds are financial instrument which represents company’s…

Q: On March 31, 2018, Wins Corporation issued $2,000,000 of its 6%, 10-year bonds for $1,758,200…

A: S.No. Date Particulars Debit Credit 1 March 31, 2018 Cash  $  1,758,200.00       Discount on…

Q: On March 1, 2020, Mitchell Inc. issued 60, 6%, $1,000 bonds dated March 1, 2020 for $62,626. The…

A: Bond Payables: In the financial statement, bonds payable represents the amount owing to bondholders…

Q: On January 1, 2020, Fergus Corporation issued $800,000, 10%, 5-year bonds. Thebond interest is…

A: The correct option is option “d”.

Q: At the beginning of 2020 Max company issued 10% bonds with a face value of 900,000. These bonds…

A: Coupon rate = 10%/2 = 5% Market rate = 12%/2 = 6% Number of periods = 5*2 =10 Interest paid = Face…

Q: On January 1,2019, ABC Corporation issued a 5-year, 12%, 1,000 of the P 5,000 face value bonds with…

A: Carrying value of the bonds as of December 31,2020 = Present value of principal + Present value of…

Q: On December 31, 2018, White Company issued $400,000 of five-year, 12% bonds payable for $430,887,…

A: Premium on bonds = Issue value - Face value = $430,887 - $400,000 = $30,887

Q: On May 1,2020, ABC Corporation issued a 5-year, 10%, 1,000 of the P 5,000 face value bonds with a…

A: Upon initial recognition, the financial liabilities shall be measured at fair value. In general, the…

Q: On January 1, 2020, Wolf Company issued 10% bonds in the face amount of P5,000,000, which mature on…

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

Q: On May 31, 2020, BLUE Company issued 6% bonds with face amount of ₱4,000,000 for net proceeds of…

A: INTEREST EXPENSE IS THE COST INCURRED BY AN ENTITY FOR THE BORROWED FUNDS .

Q: On March 2, 2020, VWX Co. received authorization to issue P6,000,000, 5-year bonds with interest of…

A: Amortization of Bond Premium refers to the amortization of excess premium paid over and above the…

Q: On January 1, 2022, Isabel Company purchased bonds with face amount of P8,000,000 for P7,679,000 to…

A: The question is based on the concept of Financial Instruments. Financial Assets are investment…

Q: On January 1, 2021, a company issued 10-year, $3,000,000, 6% bonds with semiannual interest…

A: a.

Q: On January 1, 2020, CAB Co. issued 9% bonds in the amount of P2,500,000, which mature on January 1,…

A: Interest payment on June 30, 2020 = Face value of bonds x rate of interest x 6/12 =2500000*9%*9/12 =…

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: Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest…

A: Effective Interest rate refers to the compounded interest rate that the bond holder actually pays as…

Q: On December 31, 2019, Wintergreen, Inc, issued $150,000 of 7 percent, 10-year bonds at a price of…

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

Q: Ruby Corp. is authorized to issue P 5,000,000 of 5- year bonds dated June 30,2018 with a stated…

A: This question is based on the fair valuation/measurement of financial liabilities. Here Present…

Q: On January 1,2020, ABC Corporation issued a 5-year, 10%, 1,000 of the P 5,000 face value bonds with…

A: Annual interest payment = Face value of the bonds x rate of interest x no. of months /12 =…

Q: On June 1, 2019, Bramble Company sold $3,120,000 in long-term bonds for $2,736,600. The bonds will…

A: Amortization of bond: The process of allocation and reduction of the discount or premium on bonds to…

Q: On May 1,2020, ABC Corporation issued a 5-year, 10%, 1,000 of the P 5,000 face value bonds with a…

A: We know that the current carrying value of the bond is the present value of all the cash payments to…

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: Nates corporation issued $1,500,000 of 11% of bonds at 97 on Jan 2,2019. Interest is paid…

A: Bond is an investment security which provides a regular interest income at fixed rate to the bond…

Q: On January 1,2019, ABC Corporation issued a 5-year, 12%, 1,000 of the P 5,000 face value bonds with…

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

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

A: a. Journal entry at the date of the bond purchase:

Q: On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3-year bonds with face value of P5,000,000 at…

A: PV of cash flows=Present value of Future payments(Interest+Face value) @ YTM

Q: On January 1, 2020, Edison Co. issued eight-year bonds with a face value of P 2,000,000 and a stated…

A: Solution: Bonds are the debt instruments issued by entity to obtain funding. Bonds are having…

Q: On May 31, 2020, VIOLET Company issued 6% bonds with face amount of ₱4,000,000 for net proceeds of…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: On November 1, 2021, Mason Company issued P8,000,000 of its 10 year, 8% term bonds dated October 1,…

A: Total discount on issue of bonds = Face value of bonds - issue value of bonds = P8,000,000 -…

Q: On January 1, 2020, Hummer Company purchased 7% bonds, having a maturity value of $500,000, for…

A: 7% bond purchased, maturity value - $500,000, price - $570,000 Yield on the bond- 5% Purchased on –…

Q: On January 1, 2019, Toni Corporation issued 3,000 of its 9%, P1,000 bonds when the prevailing market…

A:

Q: On January 1, 2019, Electro Inc. issued $740,000 of 7.5%, four-year bonds that pay interest…

A: Journal entry is record of a transaction in accounting system

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.