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Calculate the present value of the bonds at issuance

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Question - Grove Corporation issued $9,000,000 of 8% coupon rate bonds on January 1, 2017, due on January 1, 2022. The interest is to be paid each January 1 and July 1 beginning July 1, 2017. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31 and uses the effective interest method for its bonds.

a. Calculate the present value of the bonds at issuance.

b. Prepare an amortization schedule for just the first two semiannual interest periods.

Reference no: EM132479051

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