Assignment Task: Grove Corporation issued $7,000,000 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.
Q1. Calculate the present value of the bonds at issuance. Show all work.
Q2. Prepare a PARTIAL amortization schedule for just the first two semiannual interest periods.
Q3. Prepare Grove's necessary journal entry to record the issuance of the bonds on January 1, 2017.
Q4. Prepare Grove's necessary journal entry to record the first interest payment on July 1, 2017.
Q5. Prepare Grove's necessary adjusting entry on December 31, 2017.
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