Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 16, Problem 9AP
Mr. Jolly received the $100,000 face amount on the redemption of a matured corporate bond. How much interest income does he recognize on redemption if:
- a. He purchased the publicly traded bond through his broker for $93,100?
- b. He purchased the bond from the corporate issuer at its $72,900 original discount price?
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Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security.
Date of purchase:
January 1, 2021
Purchase price:
P4,200,000
Principal amount:
P4,000,000
Cash interest:
5% per annum, payable on December 31
Effective interest:
3.8806% per annum
Maturity date:
December 31, 2025
Fair value of the bond:
December 31, 2021
P4,894,000
December 31, 2022
P4,560,000
The bond was sold on December 31, 2022 at its fair value.
If the bonds are purchased on September 1, 2021 rather than January 2021 and the company still reports on a calendar basis, and the bonds are held for collection of contractual cash flow, what amount is the carrying value of investment in 2024?
a.
4,098,425
b.
4,070,763
c.
4,084,594
d.
4,043,102
Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security.
Date of purchase:
January 1, 2021
Purchase price:
P4,200,000
Principal amount:
P4,000,000
Cash interest:
5% per annum, payable on December 31
Effective interest:
3.8806% per annum
Maturity date:
December 31, 2025
Fair value of the bond:
December 31, 2021
P4,894,000
December 31, 2022
P4,560,000
The bond was sold on December 31, 2022 at its fair value.
If the bonds are held for collection of contractual cash flow, what amount is the carrying value of investment in 2024?
a.
4,000,000
b.
4,043,102
c.
4,084,594
d.
4,200,000
Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security.
Date of purchase:
January 1, 2021
Purchase price:
P4,200,000
Principal amount:
P4,000,000
Cash interest:
5% per annum, payable on December 31
Effective interest:
3.8806% per annum
Maturity date:
December 31, 2025
Fair value of the bond:
December 31, 2021
P4,894,000
December 31, 2022
P4,560,000
The bond was sold on December 31, 2022 at its fair value.
If the bonds are held for trading, the amount of income (loss) recognized in Profit or Loss in 2022?
Chapter 16 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 16 - Contrast the income tax consequences of the yields...Ch. 16 - Prob. 2QPDCh. 16 - Mrs. Buckley, age 74, has 100,000 in a certificate...Ch. 16 - Ms. Quint sadly concluded that a 7,500 debt owed...Ch. 16 - Prob. 5QPDCh. 16 - Prob. 6QPDCh. 16 - Discuss the potential effect of the passive...Ch. 16 - Prob. 8QPDCh. 16 - Prob. 9QPDCh. 16 - Prob. 10QPD
Ch. 16 - Prob. 11QPDCh. 16 - Prob. 1APCh. 16 - Mr. and Mrs. Lays taxable income is 679,000, which...Ch. 16 - Dianne Stacy, a single taxpayer, has 272,000...Ch. 16 - Prob. 4APCh. 16 - Mrs. Nunn, who has a 24 percent marginal tax rate...Ch. 16 - Refer to the preceding problem and assume that...Ch. 16 - Mrs. Yue, a resident of Virginia, paid 50,000 for...Ch. 16 - Ms. Pay, who has a 40.8 percent marginal tax rate...Ch. 16 - Mr. Jolly received the 100,000 face amount on the...Ch. 16 - Prob. 10APCh. 16 - Prob. 11APCh. 16 - Prob. 12APCh. 16 - Prob. 13APCh. 16 - Fifteen years ago, Mr. Fairhold paid 50,000 for a...Ch. 16 - Refer to the facts in the preceding problem....Ch. 16 - Prob. 16APCh. 16 - Prob. 17APCh. 16 - Three years ago, Mrs. Gattis loaned 10,000 to Mr....Ch. 16 - Prob. 19APCh. 16 - Prob. 20APCh. 16 - Mrs. Beard recognized a 12,290 capital loss on the...Ch. 16 - Prob. 22APCh. 16 - Prob. 23APCh. 16 - Mr. and Mrs. Revel had 206,200 AGI before...Ch. 16 - Prob. 25APCh. 16 - Mr. Fox, a single taxpayer, recognized a 64,000...Ch. 16 - Mrs. Cox, a head of household, earned a 313,000...Ch. 16 - Prob. 28APCh. 16 - Prob. 29APCh. 16 - Mr. Dunn, who has a 32 percent marginal rate on...Ch. 16 - Prob. 31APCh. 16 - Prob. 32APCh. 16 - Prob. 33APCh. 16 - Prob. 34APCh. 16 - Prob. 35APCh. 16 - Prob. 36APCh. 16 - Ms. Turney owns a one-half interest in an...Ch. 16 - Prob. 38APCh. 16 - Prob. 39APCh. 16 - Prob. 40APCh. 16 - Mr. Erwins marginal tax rate on ordinary income is...Ch. 16 - Prob. 42APCh. 16 - Prob. 43APCh. 16 - Prob. 44APCh. 16 - Prob. 45APCh. 16 - Mrs. Wolter, an unmarried individual, owns...Ch. 16 - Prob. 1IRPCh. 16 - Prob. 2IRPCh. 16 - Prob. 3IRPCh. 16 - Prob. 4IRPCh. 16 - Prob. 5IRPCh. 16 - Two years ago, Ms. Eager loaned 3,500 to her...Ch. 16 - Prob. 7IRPCh. 16 - This year, Ms. Tan had a 29,000 capital loss...Ch. 16 - Prob. 9IRPCh. 16 - Mr. Pugh has a 7,900 adjusted basis in his limited...Ch. 16 - Prob. 11IRPCh. 16 - Mr. Durst died on March 8. His taxable estate...Ch. 16 - Prob. 13IRPCh. 16 - Prob. 1RPCh. 16 - Prob. 2RPCh. 16 - Prob. 1TPCCh. 16 - Ms. Kaspari, who has a 24 percent marginal rate on...Ch. 16 - Prob. 3TPCCh. 16 - Prob. 4TPC
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- Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security. Date of purchase: January 1, 2021 Purchase price: P4,200,000 Principal amount: P4,000,000 Cash interest: 5% per annum, payable on December 31 Effective interest: 3.8806% per annum Maturity date: December 31, 2025 Fair value of the bond: December 31, 2021 P4,894,000 December 31, 2022 P4,560,000 The bond was sold on December 31, 2022 at its fair value. If the bonds are held for collection of contractual cash flow and for sale of financial asset, what amount is the carrying value of Investment in 2022? a. 4,200,000 b. 4,124,536 c. 3,800,000 d. 4,560,000arrow_forwardMr. Vincent Gomez bought sixty ₱1,500.00 ACTS bonds at 103. What is his totalinvestment in ACTS bonds?arrow_forwardPedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security. Date of purchase: January 1, 2021 Purchase price: P4,200,000 Principal amount: P4,000,000 Cash interest: 5% per annum, payable on December 31 Effective interest: 3.8806% per annum Maturity date: December 31, 2025 Fair value of the bond: December 31, 2021 P4,894,000 December 31, 2022 P4,560,000 The bond was sold on December 31, 2022 at its fair value. If the bonds are held for trading, the amount of long term investment be presented in the statement of financial position in 2022?arrow_forward
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