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I'm trying to create seperate squares out of this grid to use Live corners. They are all seperate lines right now, as you can see in my layers panel. My apologies if this is a very basic question.
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I am not sure how you created that grid and ended up with lines. I suggest that you make a rectangle and then go to Object>Path>Split into Grid and then you will have separate Groups and can make rounded rectangles from there.
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The Rectangular Grid tool does not create separate rectangles. Do what michelew83603738 suggested instead.