1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Yuliya22 [10]
2 years ago
11

On January 1, 2017, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation, issued on January 1, 2013, at

par. The bonds are held as an investment. Determine the gain and the character of the gain if the bonds are sold on January 1, 2019, for a. $191,000 b. $185,750 C. $183,000
Business
1 answer:
zimovet [89]2 years ago
8 0

The determination of the gain and the character of the gain if the Penn Corporation bonds are sold by Swen on January 1, 2019, for the proceeds of each sale is as follows:

                                        (a)                          (b)                      (c)

Sales proceeds          $191,000             $185,750          $183,000

Carrying value           $185,600            $185,600          $185,600

Capital gain (loss)       $5,400                    $150            ($2,600)

<h3>What is the carrying value of bonds?</h3>

The carrying value of a bond is the net amount between the bond's face value plus (minus) any unamortized premiums or discounts.

The carrying value is the book value of the bond.

When a bond receivable is sold, capital gain or loss is realized from the sale, which gives rise to capital gain tax.

<h3>Data and Calculations:</h3>

Bond's price = $184,000

Face value of bonds receivable = $200,000

Premium received = $16,000 ($200,000 - $184,000)

Interest rate = 8%

Maturity period = 20 years

Payment date = January 1, 2017

Straight-line amortization of premium = $800 ($16,000/20)

Carrying value after two years, January 1, 2019, = $185,600 ($184,000 + $1,600)

                                           (a)                          (b)                      (c)

Sales proceeds             $191,000             $185,750          $183,000

Carrying value              $185,600            $185,600          $185,600

Capital gain (loss)          $5,400                    $150            ($2,600)

Carrying value:

Face value                  $200,000

Unamortized premium  $14,400 ($16,000 - $1,600)

Carrying value            $185,600

Learn more about capital gain from bond sales at brainly.com/question/19422959

You might be interested in
In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures from histori
pychu [463]

Answer:

$19,708,745

Explanation:

We first have to calculate the present value of the bonds:

Nper = 20 (10 years x 2 payments per year)

R = 11% / 2 = 5.5%

Payment = 83 / 2 = 41.50

Future value = 1,000

PV = ?

To calculate the present value we can use an excel spreadsheet and the present value function =PV(5.5%,20,41.5,1000) = $838.67

Now we calculate how many bonds were issued = $23,500,000 / $1,000 = 23,500 bonds.

To determine the market value of the debt outstanding we multiply the present value of the bonds times the total number of bonds outstanding

= $838.67 x 23,500 = $19,708,745

8 0
3 years ago
Dale works with a publishing company. Everytime he writes a good article he gets lots of fab mail expressing support to him. In
marissa [1.9K]
<span>unconditioned stimulus. 

im not sure though </span>
8 0
3 years ago
Read 2 more answers
Which promotion mix element stimulates purchase directly through an incentive to buy, such as a coupon or rebate?
Darina [25.2K]

Sales promotion mix element stimulates purchase directly through an incentive to buy, such as a coupon or rebate.

<h3>How does sales promotion work?</h3>
  • Sales promotion is one of the components of the promotional mix.
  • Sales promotion is a marketing strategy where a company would utilize brief-term campaigns to generate interest and demand for a product, service, or other offerings.
  • Advertising, personal selling, direct marketing, and publicity/public relations make up the bulk of the promotional mix.
  • Types of Sales Promotion - 4 Important Types: Consumer Sales Promotion, Dealer Promotion, Business Promotion, and Public Relations

To learn more about promotion, refer to the following link:

brainly.com/question/14772910

#SPJ4

3 0
1 year ago
What is teaching? name the manpower related to the teaching sector. <br><br>​
mr Goodwill [35]

Answer:

See below

Explanation:

<u></u>

<u>1. Teaching</u>

Teaching is a deliberate process of sharing knowledge and information in an organized manner and within a discipline. To teach is to provide experiences that stimulate the psychological and intellectual growth of a person.  It involves the more knowledgeable instructor, issuing guidance and instructions to another person who seeks to acquire knowledge.

Teaching takes place in schools and the out-of-school environment.

<u>2. The manpower related to teaching include,</u>

  1. The teacher: Also known as a tutor, instructor, or lecturer.
  2.  Education Administrators: Made-up of heads of leaning institutions,    education supervisors and the top management of education in a country.
  3.  Support staff in educational institutions.
  4.  Teacher trainers,
8 0
3 years ago
A company purchases a machine for $12,000. The estimated residual value is $4,000. The machine has a useful life of 5 years, and
tatuchka [14]

Answer:

$2,400

Explanation:

The computation of the depreciation expense under the activity-based depreciation method is shown below:

= (Original cost - residual value) ÷ (estimated production units)

= ($12,000 - $4,000) ÷ (20,000 units)

= ($8,000) ÷ (20,000 units)

= $0.4 per unit

Now for the first year, it would be

= Production units in first year × depreciation per unit

= 6,000 units × $0.4

= $2,400

8 0
3 years ago
Other questions:
  • If your seller cost is $8.00 and the price ceiling is $7.00, you will:
    10·1 answer
  • Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the curren
    6·1 answer
  • Moses is working on a kibbutz in Israel where all the members have the same standard of living and they equally divide the profi
    10·1 answer
  • A monopolist makes self‑cleaning jackets. At a price of $100 each, it can sell 20 jackets. At a price of $98 each, it can sell 2
    9·2 answers
  • What are the advantages of collecting payment at the time of service?
    15·1 answer
  • The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance i
    11·1 answer
  • The Allowance for Bad Debts has a credit balance of $ 7 comma 500 before the adjusting entry for bad debts expense. After analyz
    12·1 answer
  • Because stocks rely on dividends as the principal source of cash flow, ascertaining stock prices is an easier and more precise p
    15·1 answer
  • Which of the following is a term for physical goods that are bought and<br> sold?
    15·1 answer
  • even though the taxpayer is claimed as a dependent on another tax return, he or she can still file an income tax return to repor
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!