Briar Industries sold its 5% bonds with a maturity value of $4,000,000 on January 1st, 2016. At the time of the sale, the bonds had 10 years until they reached maturity and a market rate of 6%. Interest on the bonds is payable annually on January 1st. The bonds are callable at 101 at any time after July 1st, 2017. The company uses the effective rate of interest to amortize the bond discount.

On July 1st, 2017, the company retired 75% of the bond issue at the call price of 101.