Prepare journal entries to record the following transactions related to long-term bonds of Starr Co.
(a) On April 1, 2006, Starr issued $500,000, 9% bonds for $537,868 including accrued interest. Interest is payable annually on January 1, and the bonds mature on January 1, 2016.
(b) On July 1, 2008 Starr retired $150,000 of the bonds at 102 plus accrued interest. Starr uses straight-line amortization.