Calculate the issuing price of the bonds

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Reference no: EM133370196

Question: Vanguard Corporation issued $9,000,000 of 15% bonds on January 1, 2023, due on January 1, 2035. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31. Present value of 1 for 24 periods at 5.0% 0.31007 Present value of 1 for 24 periods at 7.5% 0.17628 Present value of an ordinary annuity for 24 periods at 5.0% 13.79864 Present value of an ordinary annuity for 24 periods at 7.5% 10.98297 Instructions

(a) Calculate the issuing price of the bonds (show your work).

(b) Prepare the journal entries for the second year (January 1, 2024 - January 1, 2025) using the effective-interest method.

Reference no: EM133370196

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