The long-term liability section of twin digital

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The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2012, included 14% bonds having a face amount of $20 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, 2013, Twin Digital retired the bonds at 103 ($20.6 million) before their scheduled maturity.

a) Prepare the journal entry by Twin Digital to record the semiannual interest on July 1, 2013.
b) Prepare the journal entry by Twin Digital to record the redemption of the bonds on July 1, 2013.

Reference no: EM13477333

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