On July 1, 2018, Inuvialuit Golf Corp. issued $5,000,000 of five-year, 6%, semi-annual bonds for $5,040,000. At time of issue, Inuvialuit paid its investment bank a $40,000 sales commission. On July 31, 2021, Inuvialuit calls $3,000,000 of the bonds, paying 102 plus accrued interest, and retires them. On March 31, 2022, Inuvialuit purchases the remaining bonds on the open market for $1,980,000 including accrued interest and retires them. Inuvialuit’s year-end is August 31.
The company does not use reversing entries.

Required:
a. Prepare journal entries to record:
i. The issuance of the bonds on July 1, 2018.
ii. Repurchase of the bonds on July 31, 2021.
iii. Payment of interest on December 31, 2021.
iv. Retirement of the remaining bonds on March 31, 2022.

b. Provide a brief explanation as to the most likely reasons that Inuvialuit was able to repurchase its bonds at a discount.