On January 1, 2016, Kunto, a cash basis taxpayer, pays $136,835 for a 24-month certificate. The...
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On January 1, 2016, Kunto, a cash basis taxpayer, pays $136,835 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $148,000. In your computations, round any amounts to the nearest dollar. 136,835 x income for 2016 and s Kunto has $ Feedhed Cha My W x for 2017, Lenders frequently make loans that require a payment at maturity of more than the amount of the original loan. The difference between the amount due at maturity is actually interest but is referred to as original issue discount. On January 1, 2016, Kunto, a cash basis taxpayer, pays $136,835 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $148,000. In your computations, round any amounts to the nearest dollar. 136,835 x income for 2016 and s Kunto has $ Feedhed Cha My W x for 2017, Lenders frequently make loans that require a payment at maturity of more than the amount of the original loan. The difference between the amount due at maturity is actually interest but is referred to as original issue discount.
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Total income of Kunto over the two years on the certificate 148000 13... View the full answer
Related Book For
South Western Federal Taxation 2017 Comprehensive
ISBN: 9781305874169
40th Edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young
Posted Date:
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