Ellis company issues a 6.5%, five year bonds dated January 1, 2019, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issues at a price of $255,333. The annual market rate is 6% on the issue date. (these are annual dates) i. Determine the proceeds using the PV function in excel. (please show work/ formulas) ii. Create and report the 10-period amortization table(show work/formulas) iii. Make the journal entry for the proceeds, plus the first two interest payments. Report the effects of all entries..

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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.