Bocelli Co. purchased $162,000 of 7%, 20-year Sanz County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Bocelli Co. sold $31,200 of the Sanz County bonds at 96 plus $182 accrued interest less a $105 brokerage commission. Provide journal entries for the following (refer to the Chart of Accounts for exact wording of account titles): a. The purchase of the bonds on May 11 plus 40 days of accrued interest; assume a 360-day year. b. Semiannual interest on October 1. c. Sale of the bonds on October 31. d. Adjusting entry for accrued interest of $2,289 on December 31, Year 1.

Q: Bocelli Co. purchased $24,000 of 5%, 10-year Sanz County bonds on May 11, Year 1, directly from the…

A: given that, purchase price of the bonds = $24000 rate of interest on bonds = 5%. interest recievable…

Q: The Polythene Pam Company purchases P2,000,000 of bonds asset has been designated as one at fair…

A: Solution: Cost of 10% bonds sold = Total cost *10% = 2000000 * 10% = P200,000

Q: Trog Industries pays and records the semiannual interest on its $520,000, 10-year, 6% bonds…

A: Here in this question, we are required to make journal entry for interest payment and discount…

Q: Annual cash interest of 8 percent ($84,000) was to be paid on this debt. The bonds were issued at a…

A: Consolidation entry refers to the process of grouping the financial entries of a parent company with…

Q: Hendricks Corporation purchased trading investment bonds for $50,000 at par. At December 31,…

A: a. Account Titles and Explanation Debit Credit Investment in trading securities $50,000…

Q: On September 1, 2021, Howell Company purchased 600 of the P1,000 face value, 9% bonds of Ramsey,…

A: The bonds purchased for non trading are recorded as investment in the balance sheet. The difference…

Q: On July 1, Year 1, ABC Corp purchased 6.00% bonds having a maturity value of $100,000 for $105,079.…

A: Correct option is a. $142 Unrealized gain or loss recorded under OCI under December 31 year 1 is…

Q: Paulina, Incorporated, owns 80 percent of Southport Company. On January 1, 2021, Paulina acquires…

A: Intra-entity transactions are those transactions that take place within the companies. It is used to…

Q: Demopoulos Company acquired $151,200 of Marimar Co., 8% bonds on May 1 at their face amount.…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: On April 30, CHIA-SEED Company issued 7,000 of 15% ₱1,000 bonds at 95. The bonds have a five-year…

A: To find the interest expenses of bond, we first need to calculate the yield or ytm of bond, which…

Q: Landis Company purchased $3,000,000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2018, with…

A: Other comprehensive income=Fair value of bonds-(Sales value of bonds-Amortized premiums)

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A: When company owns more than 50% shares in other company, then the acquired company is parent company…

Q: Assuming that both parties use the straight-line method, what consolidation entry would be required…

A: 1) Year Book Value at the beginning of the year Effective Interest rate Cash Interest…

Q: Several years ago Brant, Inc., sold $950,000 in bonds to the public. Annual cash interest of 8…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

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Q: Several years ago Brant, Inc., sold $780,000 in bonds to the public. Annual cash interest of 9…

A: Prepare Consolidation Entry B to account for these bonds on December 31, 2019

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A: A consolidated balance sheet is acknowledged as the balance sheet prepared by a parents company…

Q: Several years ago Brant, Inc., sold $800,000 in bonds to the public. Annual cash interest of 8…

A: Journal Entry - It is record of every business transactions whether it is economic or non economic…

Q: School Perfume Company issued $300,000 of 10 percent bonds on January 1, 20X2, at 110. The bonds…

A: Consolidation means the merger of at least two organizations where one organizations acquire share…

Q: Keyser Company acquired $3,514,000 face value, 9% bonds as an available-for-sale investment on…

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

Q: Colah Company purchased $2,000,000 of Jackson, Inc., 6% bonds at par on July 1, 2021, with interest…

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Q: SEED Company

A: At The Chia Co we tend to area unit captivated with positive plant primarily based nutrition. Our…

Q: une 30 and December 31. On March 31,1989, Taylor converts $200,000 of the bonds. Both Taylor and…

A: Conversion of debentures The procedure by which a Debenture Holder decides to convert his or her…

Q: Demopoulos Company acquired $150,000 of Marimar Co., 6% bonds on May 1 at their face amount.…

A: Introduction:- Journal entry means as follows:- Journal entry is used to record business…

Q: On August 1, 2021, Sheffield Corporation, a public company, purchased $86,400 of Alaska Ltd.…

A: SHEFFIELD CORPORATION BALANCE SHEET (PARTIAL) For the year ended December 31, 2021…

Q: An investor company purchased $491,000 of 8% bonds from the investee company on January 1, 2020,…

A: Particulars Amount Cost of Bond Investment on Jan.1,2020 $755470 Add: Amortization of Discount…

Q: Bocelli Co. purchased $120,000 of 6%, 20-year Sanz County bonds on May 11, Year 1, directly from the…

A:

Q: On January 1, Year 1, Narito Company purchased P100,000 face value 5-year bond of Wolf Corporation…

A: Impairment Loss Impairment can happen as a consequence of one-time or unique occurrences, such as a…

Q: Darcy Company is an 80%-owned subsidiary of Kraco Industries. Darcy Company issued 10-year, 8% bonds…

A:

Q: Several years ago Brant, Inc., sold $900,000 in bonds to the public. Annual cash interest of 9…

A: A bond refers to the instrument which is issued by the government to borrow money when needed. It is…

Q: On April 30, Petrol Company issued 7,000 of 15% ₱1,000 bonds at 95. The bonds have a five-year term…

A: SOLUTION- BOND IS A WRITTEN AGREEMENT OR CONTRACT BETWEEN AN ISSUER AND THE HOLDER THAT REQUIRES THE…

Q: Blossom Company purchased 70 Rinehart Company 5%, 10-year, $1,000 bonds on January 1, 2022, for…

A: Formula: Interest expense = bond value x Interest rate x Time period

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Q: On July 1, Year 1, XYZ Corporation purchased as a long-term investment a $2 million face amount ABC…

A: The question is based on the concept of accounting of income from held to maturity securities. In…

Q: Bocelli Co. purchased $120,000 of 6%, 20-year Sanz County bonds on May 11, Year 1, directly from the…

A: Bond investment: Bond investments are debt securities which pay a fixed interest revenue to the…

Q: Three years ago American Insulation Corporation issued 10%, $800,000, 10-year bonds for $770,000.…

A: Calculate the discount on bond as follows: Discount on bond = face value - issue price Discount on…

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A: Any change in the value of Available-for-Sale Debt Securities are recorded an gain or loss…

Q: Linco Industries is a 90%- owned subsidiary of Sharp Incorporated. On January 1, 2015, Linco issued…

A: Prepare eliminations and adjustments as explained: Result:

Q: On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10-year, 6% bonds, dated July 1 at…

A: Journal entry is the one where the transactions of the business are recorded in the books of the…

Q: Gonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1 at their face amount. Interest…

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Q: Gillooly Co. purchased $78,000 of 7%, 10-year Lumpkin County bonds on May 11, Year 1, directly from…

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Q: On January 1, 2021, RUDOLPH Company received ₱107,720 for a ₱100,000 face amount, 12% bond, a price…

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Q: Gillooly Co. purchased $360,000 of 6%, 20-year Lumpkin County bonds on May 11, Year 1, directly from…

A: SOLUTION WORKING NOTE- A- 360000 *6 % 40/360 = 2400. B- 360000*6%*6/12 = 10800. C-1 90000*98%…

Q: Three years ago American Insulation Corporation issued 10 percent, $800,000, 10-year bonds for…

A: Early Extinguishment debt When the debt obligations are retired before its scheduled maturity date,…

Q: On January 1, Year 1, Narito Company purchased a P100,000 face value 5-year bond of Wolf Corporation…

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Q: On February 1, Hansen Company purchased $120,000 of 5%, 20-year Knight Company bonds at their face…

A: Calculate the amount of interest received on $120,000 from February 1 to July 1 (5 months).

Q: On May 1, 20X1, Starlight Company purchased $750,000 of Gazing Corp's 12% bonds at 100 plus accrued…

A: Journal entries shows the recording of the transaction during an accounting year and every…

Q: On January 1, Year 1, Tina Company purchased P500,000, 12% bonds of Erika Company for P464,882, a…

A: Working Notes :-                       Company intended to collect the principal and…

Q: On February 1, Hansen Company purchased $108,000 of 5%, 15-year Knight Company bonds at their face…

A: Interest received july 1=108,000×5%×612=$2,700

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.