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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.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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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.

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