Bonds Payable- Effective Basis Jiggy Jams Incorporated is financing the expansion of its music retail stores by issuing 5 year, $8,250,000(Face value), 6% Bonds. The Bonds are issued on June 30, 2012, at the time of issuance the market rate of interest was 8%. Interest payments on the bonds are payable every 6 months beginning on December 31, 2012. (you will need your present value factor tables)

a) Calculate the issue price(i.e. how much cash they will receive from lenders investing in the bonds) of Jiggy Jams Inc's Bonds on June 30, 2012.

b) Based on the results of your calculation prepare the journal entry to account for the Bond issuance on June 30, 2012. Prepare the journal entry