As the controller of the company, determine the selling price of the bonds.
(Computation of Bond Liability) Lance Armstrong 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 companyâs bikes. After a careful evaluation of the
request, the board of directors has decided to raise funds for the new
plant by issuing $2,000,000 of 11% term corporate bonds on March 1,
2003, due on March 1, 2018, 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