Bond premium amortization tax
[DOC File]Weebly
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b. Deposit to a bond sinking fund. c. Sale of a loan receivable. d. Payment of interest to a creditor. S35. The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n) a. addition to net income. b. deduction from net income. c. investing activity.
[DOC File]CHAPTER 1
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Unlike changes in interest payable, the amortization of bond discount or premium is a difference between interest expense recognized and cash paid. (difficult, L.O. 4, Section 3, false) Any change in the principal amount of debt during the year that is not explained by issuances or repayments is due to amortization. (moderate, L.O. 4, Section 3 ...
[DOC File]Financial Reporting and Analysis
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The stated interest is equal to bond interest expense plus bond premium amortization ($3,500 + $500). Thus, the face value of the bonds is equal to $4,000/.08 = $50,000. 4) $1,900 Deferred income taxes can be found by summing the closing balance on the balance sheet and the debit to the deferred income taxes account during the year (from the ...
Chapter 7
because the bond is sold prior to maturity), the unamortized premium remains part of the tax basis of the bond or note and affects the amount of capital gain or loss taxpayers recognize when the bond or note is sold or when it matures.
[DOC File]Chap10, Ch10, Liabilities - MyESLSCA
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94. The amortization of a bond premium: A) Decreases the carrying value of a bond and increases interest expense. B) Decreases the carrying value of a bond and decreases interest expense. C) Increases the carrying value of a bond and increases interest expense. D) Increases the carrying value of a bond and decreases interest expense. Answer: B
[DOC File]P14-5 (Comprehensive Bond Problem) In each of the ...
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Use the effective interest method for discount and premium amortization (construct amortization tables ... Date Cash Credit Debit Interest Expense Debit Bond Premium Carrying Value of Bonds 6/1/01 $638,780 12/1/01 $36,000 $31,939 $4,061 634,719 6/1/02 36,000 31,736 4,264 630,455 12/1/02 36,000 31,523 4,477 625,978 6/1/03 36,000 31,299 4,701 ...
[DOC File]BONDS & L-T NOTES
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[Premium/discount is amortized from date of sales not date of bonds—above example is par bond] Amortization of discount or premium on bonds: If management can show that there is no material difference between the effective-interest-rate method and a straight-line approach, then the straight-line method is permitted.
[DOC File]1
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Amortization of bond is included in the calculation of CFO (in cash flow related to the interest). So bond premium amortization is subtracted from the net income, and bond discount amortization is added to net income. (Flash back 120. 14. Analysis of financial statements (Ratios) COMMON-SIZE STATEMENTS. RATIOS. Internal liquidity . current ...
[DOC File]Question 3 (40 minutes)
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(a) Bond interest paid to November 30, 1996 $10,000. Bond interest accrued to December 31, 1996 950. Amortization of premium on bonds issued by company 375 (b) Interest on deficient income tax installments 1,200. Interest on late municipal property taxes 500 (4) Included in other income are the following transactions:
[DOC File]Weebly
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7. Amortization of a premium increases bond interest expense, while amortization of a discount decreases bond interest expense. 8. A bond may only be issued on an interest payment date. 9. The cash paid for interest will always be greater than interest expense when using effective-interest amortization for a bond. 10.
[DOC File](2)
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The bonds were issued for $3,405,000 to yield 8%, resulting in bond premium of $405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2010, Solis's adjusted unamortized bond premium is what amount? Please show computations (4)
[DOC File]JustAnswer
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Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2012, for $108,660. Date. Cash Received. Interest Revenue. Bond Premium Amortization. Carrying Amount of Bonds. 12/31/12 $108,660. 12/31/13. $7,000. $5,433. $1,567 107,093. 12/31/14 ...
[DOC File]CHAPTER 10
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( Amortizing Bond Premium. The amortization of bond premium parallels that of bond discount. Continuing the Candlestick, Inc. example, assume the bonds are sold for $102,000, rather than $98,000. This results in a bond premium of $2,000 ($100,000 - $102,000). The premium amortization for each interest period is $400 ($2,000 ( 5).
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