Question: On April 1, 2014, Chico issued $600,000, 9% bonds (dated January 1, 2014) for $645,442 including accrued interest. Interest is payable annually on January 1,

On April 1, 2014, Chico issued $600,000, 9% bonds (dated January 1, 2014) for $645,442 including accrued

interest. Interest is payable annually on January 1, and the bonds mature on January 1, 2024. (4 marks)

On July 1, 2016, Chico retired 30% of the bonds at 102 plus accrued interest. Chico uses straight-line amortization. (6 marks)

Instructions

Prepare journal entries with explanations to record the above transactions related to Chico Ltd.'s long-term bonds:

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