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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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
15th edition
ISBN: 978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290
