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In-s [12.5K]
2 years ago
15

If a cash basis business owner pays 18 months of rent expense in advance during the last month of the tax year, how is this trea

ted on the tax return? What is the reason tax law requires this treatment?
Business
1 answer:
borishaifa [10]2 years ago
7 0

Answer:

Check the following consideration

Explanation:

Since the business owner follows cash basis of accounting the treatment is amount expensed during the financial year can be shown as expenses. hence in the current case rent for 18months can be shown as expenses for that financial year and it can be shown as a deduction while computing tax liability.

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Trew Company plans to issue bonds with a face value of $902,000 and a coupon rate of 6 percent. The bonds will mature in 10 year
Agata [3.3K]

Answer:

$807,992

Explanation:

issue $902,000 with a 6% semiannual coupon and 10 year maturity. coupon payment = $27,060

if the annual market interest rate = 7.5%, the bonds should be sold at a discount:

issue price = present value of face value + present value of interest payments

  • present value of face value = $902,000 / (1 + 3.75%)²⁰ = $431,961
  • present value of annuity = $27,060 x {1 - [1 / (1 + 3.75%)²⁰]} / 3.75% = $376,031

issue price = $431,961 + $376,031 = $807,992

the journal entry should be:

Dr Cash 807,992

Dr Discount on bonds payable 94,008

    Cr Bonds payable 902,000

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Explanation:

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2 years ago
A ———- relationship would include your co-workers and friends?
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A social relationship would include your co-workers and friends?

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Let's say Owen would like to take another loan to pay for new furniture, and the loan payment would be $325 per month. If he too
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