The long term liability section of Twin Digital Corporation's balance sheet as of December 31,2015, included 12%
Question:
The long term liability section of Twin Digital Corporation's balance sheet as of December 31,2015, included 12% bonds having a face amount of $35 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. On July 1, 2016, Twin Digital retired the bonds at 104 ($36.4 million) before their scheduled maturity.
Required:
1. & 2. Prepare the necessary journal entries for Twin Digital on July 1, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in a whole dollar.)
Journal entry, Record the semiannual interest.