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Brums [2.3K]
3 years ago
11

Theresa, a cash basis taxpayer, purchased a bond on July 1, 2013, for $10,000, plus $400 of accrued interest. The bond paid $800

of interest each December 31. On March 31, 2017, she sold the bond for $9,800, which included $200 of accrued interest.a. Theresa has $200 interest income and a $400 loss from the bond in 2017.b. Theresa has $200 interest income and a $200 gain from the bond in 2017.c. Theresa has a $100 loss from the sale of the bond and no interest income.d. Theresa's loss on the sale of the bond is $600.e. None of these.
Business
1 answer:
Radda [10]3 years ago
3 0

Answer:

a. Theresa has $200 interest income and a $400 loss from the bond in 2017

Explanation:

Since the bond was sold for $9,800 which includes the $200 accrued interest that means it reflects the interest income of $200

And, if we exclude the interest income from the sale value of bond, then the value is $9,600 and its purchase price without considering the accrued interest is $10,000. So, after comparing the purchase price and the sale price the loss of $400 would be determined

$9,600 - $10,000 = $(400)

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Luba_88 [7]

Answer:

1 - Financing activity

2- Operating activity

3- Financing activity

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Explanation:

Basically there are three types of activities:

1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

2. Investing activities: It records those activities which include purchase and sale of the long term assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.  

So the categorization is shown below:

1. Issued $160,000 of bonds payable - cash flow from financing activity

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8 0
3 years ago
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ahrayia [7]

In 2005, bankruptcy reform laws:

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Answer:

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This law was reviewed because it wanted to prevent abuse of the bankruptcy process.

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3 years ago
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Answer:

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Explanation:

the journal entries should be:

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The cash flow from investing activities will:

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