The long-term liability section of Twin DigitalCorporation's balance sheet as of December31, 2020, included 10% bonds having a faceamount of $50 million and a remainingdiscount of $1 million. Disclosure notesindicate the bonds were issued to yield 12%.Interest expense is recorded at the effectiveinterest rate and paid on January 1 and July 1of each year. On July 1, 2021, Twin Digitalretired the bonds at 103 ($51.5 million) beforetheir scheduled maturity.Required:1. & 2. Prepare the necessary journal entriesby Twin Digital on July 1, 2021. (If no entry isrequired for a transaction/event, select "Nojournal entry required" in the first accountfield. Enter your answers in whole dollars.)Journal entry worksheetRecord the semiannual interest.Note: Enter debits before credits.DateGeneral JournalDebitCreditJuly 01, 2021

Journal Entry: Journal entry has two effects for every transaction. The journal entry is passed by…

The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 10% bonds having a face amount of $50 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 12%.

The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 10% bonds having a face amount of $50 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 12%.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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Question

The long-term liability section of Twin Digital
Corporation's balance sheet as of December
31, 2020, included 10% bonds having a face
amount of $50 million and a remaining
discount of $1 million. Disclosure notes
indicate the bonds were issued to yield 12%.
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 103 ($51.5 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
Record the semiannual interest.
Note: Enter debits before credits.
Date
General JournalDebitCredit
July 01, 2021

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