Richardson Inc. sold $500,000, 8%, 10-year bonds on June 1, 2020. Other bonds issued by Richardson with identical terms are traded based on a market rate of 10%. Interests are paid semi-annually on May 31 and November 30. Richardson is a Canadian public company and follows IFRS.

On June 1, 2022, Richardson retired 20% of the bonds, when the bonds are selling at 98.

Required:

a. Prepare the journal entry for the issuance of the bonds on June 1, 2020. (2 marks)

b. How much interest expense related to these bonds would be reported on Richardson's income statement for the year ended December 31, 2020? (3 marks)

c. Determine the gain or loss on the retirement of bonds on June 1, 2022. (2 marks)

d. Prepare the journal entry to record the partial retirement of the bonds on June 1, 2022. (3 marks)