The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2023, included 12% bonds having a face amount of $20 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. Interest was accrued and expensed on December 31, 2023. On July 1, 2024, Twin Digital retired the bonds at 102 ($20.4 million) before their scheduled maturity. Required: 1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2024.
The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2023, included 12% bonds having a face amount of $20 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. Interest was accrued and expensed on December 31, 2023. On July 1, 2024, Twin Digital retired the bonds at 102 ($20.4 million) before their scheduled maturity. Required: 1. & 2. Prepare the necessary journal entries by Twin Digital on July 1, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Interest was accrued and expensed on December 31, 2023. On July 1, 2024, Twin Digital retired the bonds at 102 ($20.4 million) before their scheduled maturity.
Required:
1. & 2. Prepare the necessary
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