On Jan 1, 20X1 received a 3-year interest bearing note collectible in 6 equal semi-annual periods. How will the business present the notes receivable at Dec 31, 20X1? Non current asset Current asset Current and Non current assets Contra asset account

On Jan 1, 20X1 received a 3-year interest bearing note collectible in 6 equal semi-annual periods. How will the business present the notes receivable at Dec 31, 20X1? Non current asset Current asset Current and Non current assets Contra asset account

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 12SPA: ACCRUED INTEREST RECEIVABLE The following is a list of outstanding notes receivable as of December...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

On Jan 1, 20X1 received a 3-year interest bearing note collectible in 6 equal semi-annual periods. How will the business present the notes receivable at Dec 31, 20X1?

Non current asset

Current asset

Current and Non current assets

Contra asset account

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