The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2020, included 12% bonds having a face amount of $45 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 102 ($45.9 million) before their scheduled maturity. Required: 1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2020, included 12% bonds having a face amount of $45 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 102 ($45.9 million) before their scheduled maturity. Required: 1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The long-term liability section of Twin Digital Corporation’s
Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 102 ($45.9 million) before their scheduled maturity.
Required:
1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2021. (If no entry is required for a transaction/event, select "No
Transcribed Image Text:The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 12% bonds having a face amount of $45 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%.
Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 102 ($45.9 million) before their scheduled maturity.
**Required:**
1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2021.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
**Journal Entry Worksheet:**
- **Prompt:** Record the semiannual interest.
- **Note:** Enter debits before credits.
**General Journal Table:**
| Date | General Journal | Debit | Credit |
|------------|-------------------------------|-------|--------|
| July 01, 2021 | Interest expense | | |
| | Discount on bonds payable | | |
| | Cash | | |
| | | | |
| | | | |
Buttons available:
- Record entry
- Clear entry
- View general journal
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education