Prepare journal entries to record the transactions

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Question - The transactions related to Chiefs Ltd.'s long-term bonds are as follows:

1. On April 1, 2020, Chiefs issued $ 600,000, 9% bonds (dated January 1, 2020) for $ 645,442 including accrued interest. Interest is payable annually on January 1, and the bonds mature on January 1, 2030.

2. On July 1, 2022, Chiefs retired 30% of the bonds at 102 plus accrued interest. The carrying value, including unamortized premium, is $624,570. It is also given that the premium is amortization over 117 months and the Chiefs uses straight-line amortization.

Instructions - Prepare journal entries to record the above transactions on the following dates:

a) April 1, 2020

b) July 1, 2022

Reference no: EM132705691

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