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Grove Corporation issued $6,000,000 of 8% bonds on October 1, 2017, due on October 1, 2022. The interest is to be paid twice a year
Grove Corporation issued $6,000,000 of 8% bonds on October 1, 2017, due on October 1, 2022. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31. Remember when interest is paid semi-annually the interest rate needs to be adjusted from the annual rate. Instructions Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Prepare the adjusting entry for the issuance of the bonds on October 1. 2017. Prepare the adjusting entry for the interest payment on April 1.2018. Use the effective-interest method. Prepare the adjusting entry for the interest payment on October 1.2018. Use the effective-interest method. Prepare the adjusting entry for December 31, 2018. Use the effective-interest method. Compute the interest expense to be reported in the income statement for the year ended December 31, 2018. Remember an amount would have been accrued for interest at December 31, 2017
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