Troomp Corporation acquired $7,200,000 par value, 14%, five-year bonds on their date of issue, January 1 of the current year. The market rate at the time of issue was 18% and interest is paid semiannually on June 30 and December 31 Troomp will use the effective interest rate method to account for this investment. Troomp intends to hold the investment until the bonds mature.
a. Determine the purchase price of the investment in bonds.