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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 $35 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 16%. |
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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 102 ($35.7 million) before their scheduled maturity. |
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Required: |
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1. |
Prepare the journal entry by Twin Digital to record the semiannual interest on July 1, 2013. (Enter your answers in whole dollars. If no journal entry is required for a transaction, select “No journal entry required” in the first account field.)
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