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The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included...

The long-term liability section of Twin Digital Corporations balance sheet as of December 31, 2020, included 14% bonds havinThe long-term liability section of Twin Digital Corporations balance sheet as of December 31, 2020, included 14% bonds havin

The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 14% bonds having a face amount of $40 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 16%. 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 101 ($40.4 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.) View transaction list Journal entry worksheet < 1 2 Record the semiannual interest. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2021 Record entry Clear entry View general journal
The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 14% bonds having a face amount of $40 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 16%. 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 101 ($40.4 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.) View transaction list Journal entry worksheet < 1 2 Record the redemption of the bonds. Note: Enter debits before credits. General Journal Debit Credit Date July 01, 2021 Record entry Clear entry View general journal
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Answer #1

Journal entry

Date account and explanation Debit Credit
July 01 Interest expense (39*16%*6/12) 3120000
Discount on bonds payable 320000
Interest payable (40*14%*6/12) 2800000
July 01 Bonds payable 40000000
Loss on redemption 1080000
Discount on bonds payable 680000
Cash 40400000
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