Carmichael Co. adopted a stock option plan for its top executives. Under the plan, each option

granted would allow an executive to purchase one share of Carmichael’s $10 par value

common stock for $40 per share.   

On January 1, 2020, Carmichael granted the executives 60,000 options. The options were non-transferable and the executive had to remain an employee of the company to exercise the options. The options were exercisable within a 2-year period beginning on January 1, 2022. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determines total compensation expense to be $1,200,000.

On July 1, 2022, 45,000 options were exercised.

Required: Based on the information above, prepare the entries required from January 1, 2020, through July 1, 2022.

On January 2, 1990, Hank Brady establishes the Judge Hank Brady Irrevocable Dynasty Trust with Tenleytown Trust Company as trustee. On January 10, 1990, Hank transfers 100 shares of Brady, Inc. stock to the trust worth $1 million. Hank Brady does not allocate any GST exemption to the trust either during the transfer or at any point after, and, therefore, the trust has an inclusion ratio of 1. The trustee has the discretion to distribute principal to the grantor's son, Mike, and Mike's sons, Greg, Peter and Bobby to provide for their welfare. Upon Mike's death, the remainder is distributed in equal shares to Mike's sons. On January 10, 2020, Mike dies. On January 10, 2020, the fair market value of the trust is $10 million. How much GST tax does the trust or its beneficiaries owe in 2020 and why? Who is responsible for paying the tax?

On June 30, 2020, Crane Company issued $5,640,000 face value of 14%, 20-year bonds at $6,488,600, a yield of 12%. Crane uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. (a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1) The issuance of the bonds on June 30, 2020.

(2) The payment of interest and the amortization of the premium on December 31, 2020.

(3) The payment of interest and the amortization of the premium on June 30, 2021.

(4) The payment of interest and the amortization of the premium on December 31, 2021.

Carmichael Co. adopted a stock option plan for its top executives. Under the plan, each option

granted would allow an executive to purchase one share of Carmichael’s $10 par value

common stock for $40 per share.   

On January 1, 2020, Carmichael granted the executives 60,000 options. The options were non-transferable and the executive had to remain an employee of the company to exercise the options. The options were exercisable within a 2-year period beginning on January 1, 2022. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determines total compensation expense to be $1,200,000.

On July 1, 2022, 45,000 options were exercised.

Required: Based on the information above, prepare the entries required from January 1, 2020, through July 1, 2022.

(NOL Carryforward, Valuation Account Needed)

Topper Company reported the following pretax financial income (loss) for the years 2018 through 2022:

2018 $ 70,000

2019 45,000

2020 (260,000)

2021 90,000

2022 215,000

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 30% for 2018 through 2020, and 20% for 2021 and thereafter.

Instructions

(a) Prepare the journal entries for the years 2018 through 2022 to record income tax expense, income tax payable (refund- able), and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that 60 percent of the benefits of the loss carryforward will not be realized.

(b) Prepare the income tax section of the 2020 income statement beginning with the line “Income (loss) before income taxes.”

Carla Company has the following two temporary differences between its income tax expense and income taxes payable.

The income tax rate for all years is 20%.

Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022.

Indicate how deferred taxes will be reported on the 2022 balance sheet. Carla’s product warranty is for 12 months.

Prepare the income tax expense section of the income statement for 2022, beginning with the line “Pretax financial income.”

OGOYA Ltd is a fast-growing company in need of new financing to fund its expansion plans. It is hoping to raise $10 million dollars from a debt issuance. It is considering the following options:

A Issue 2-year 8% debentures at par on January 1, 2019. Interest payments are made annually at the end of each year. The debenture matures on December 31, 2020.

B Issue 2-year 4% convertible debentures at par on January 1, 2019. The debentures can be converted into 10 million $1 shares at maturity on December 31, 2020. Interest payments are made annually at the end of each year. Without the conversion feature, the debenture would be priced the same as option A.

Question show the journal entries for A and B from 1 january 2019 to 31 December 2020 the face value 10 million

OGOYA Ltd is a fast-growing company in need of new financing to fund its expansion plans. It is hoping to raise $10 million dollars from a debt issuance. It is considering the following options:

A Issue 2-year 8% debentures at par on January 1, 2019. Interest payments are made annually at the end of each year. The debenture matures on December 31, 2020.

B Issue 2-year 4% convertible debentures at par on January 1, 2019. The debentures can be converted into 10 million $1 shares at maturity on December 31, 2020. Interest payments are made annually at the end of each year. Without the conversion feature, the debenture would be priced the same as option A.

Question show the journal entries for A and B from 1 January 2019 to 31 December 2020 the face value 10 million

Bonita Company sells 8% bonds having a maturity value of $1,420,000 for $1,312,340. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1.

Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.)

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Set up a schedule of interest expense and discount amortization under the effective-interest method. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 38,548.)