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tamaranim1 [39]
3 years ago
14

For bonds issued 2019, the taxpayer must amortize bond premium using which of the following methods?

Business
1 answer:
MArishka [77]3 years ago
4 0

Answer:

For bonds issued 2019, the taxpayer must amortize bond premium using  the following method:

a. Straight-Line Method.

Explanation:

The premium paid by the taxpayer for a bond represents part of the cost basis of the bond.  The bond premium can be tax-deductible at a rate spread out (amortized) over the bond's lifespan.  The straight-line method for bond premium amortization is considered to be a simpler method than the effective interest amortization method.  While the straight-line amortization divides the bond's total premium over the remaining payment periods, the effective interest, which is more complicated, computes some unique values at all points during the amortization process.

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The totals from the first payroll of the year are shown below. Total Earnings FICA OASDI FICA HI FIT W/H State Tax Union Dues Ne
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Answer and Explanation:

The journal entry to deposit the FICA and FIT taxes is as follows:

FICA OASDI $2,244.10  

FICA HI $524.83  

FIT W/H $6,515.00  

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(Being to record deposit the FICA and FIT taxes)

Here the FICA OASDI FICA HI FIT W/H is debited and the cash is credited

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On July 8, Jones Inc. issued an $75,700, 8%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends o
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Larned Corporation recorded the following transactions for the just completed month.
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Answer with its Explanation:

Part 1: $89,000 in raw materials were purchased on account.

The purchase of raw material inventory on account is treated as increase in raw material inventory and accounts payables. The journal entry would be as under:

Dr Raw Material Inventory $89,000

Cr Accounts Payables              $89,000

Part 2: $87,000 in raw materials were used in production. Of this amount, $76,000 was for direct materials and the remainder was for indirect materials.

The entry would be increase in work in progress by $76,000 & Manufacturing overhead by $11,000 and would decrease the raw material inventory with $87,000.

The journal entry would be as under:

Dr Work In Progress                 $76,000

Dr Manufacturing Overhead    $11,000

Cr Raw Material  Inventory               $87,000

Part 3: Total labor wages of $128,500 were paid in cash. Of this amount, $103,000 was for direct labor and the remainder was for indirect labor.

The direct cost are allocated to the work in progress and indirect costs are allocated to manufacturing overheads.

The journal entry would be as under:

Dr Work In Progress                 $128,500

Dr Manufacturing Overhead    $103,000

Cr Cash Account                                 $231,500

Part 4: Depreciation of $190,000 was incurred on factory equipment.

The depreciation of the factory equipment is an indirect cost and all the indirect costs are charged to manufacturing overhead.

The journal entry would be as under:

Dr Manufacturing Overhead    $190,000

Cr Cash Account                          $190,000

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