Briar Industries sold its 6% bonds with a maturity value of $3,800,000 on January 1st, 2021. At the time of the sale, the bonds had 10 years until they reached maturity and a market rate of 7%. Interest on the bonds is payable annually on January 1st. The bonds are callable at 101 at any time after July 1st, 2022.

The company uses the effective rate of interest to amortize the bond discount. On July 1st, 2022, the company retired 45% of the bond issue at the call price of 101.

Required:

1. Determine the present value of the bond and provide the journal entry to record the issue of the bond on January 1st, 2021.

2. In the final analysis, how much was the gain or loss experienced by Briar in reacquiring its 6% bonds? Provide all the journal entries to retire the bond on July 1st, 2022. Show all calculations.

3. What is the carrying value of the bond, as it would appear on the balance sheet, on December 31, 2022?