On July 1, 2019, Inuvialuit Golf Corp. issued $5,000,000 of five-year, 7%, semi-annual bonds for $5,300,000. The bonds pay interest on July 1st and January 1st each year.

On July 1, 2021, Inuvialuit calls $2,000,000 of the bonds, paying 104 and retires them. Inuvialuits year-end is December 31.

Required:

A. Calculate the effective rate of interest on the bonds at July 1, 2019 (round to 2 decimal places)

B. Determine the carrying value of the bonds on July 1, 2021. (2 marks)

C. Prepare journal entries to record the repurchase of the bonds on July 1, 2021. (7 marks)

D. How much interest would be paid to the bond holders on the January 1, 2022 interest payment date? (2 marks)