View the step-by-step solution to:


Hello - In this problem:

6-13 (Computation of Bond Liability) Messier Inc. manufactures

cycling equipment. Recently, the

vice president of operations of the company has requested construction of a new plant to meet the

increasing demand for the company's bikes. After a careful evaluation of the request, the board of

directors has decided to raise funds for the new plant by issuing $3,000,000 of 11


term corporate

bonds on March I, 2012, due on March 1,2027, with interest payable each March 1 and September 1.

At the time of issuance, the market interest rate for similar financial instruments is 10%.

As the controller of the company, determine the selling price of the bonds.

Formula for the interest payments:

PV - OA = R (PVF - OA

n, i


PV - OA = $165,000 (PVF - OA

30, 5%


PV - OA = $165,000 (15.37245

Where does the $165,000 amount come from?

Top Answer

Semi annual... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question