a. The semiannual interest payments on the bonds =

14% stated rate * $3,000,000 face amount * 6/12 =$210,000

The term of the bonds is10 years, or20 semiannual periods.

The semiannual market interest rate is = 12% * 6/12 =6%

The present value of an annuity of $210,000 for 20 periods at 6% =

      $210,000 * 11.4699 =$2,408,679

The present value of the maturity value of $3,000,000 in 20 periods at 6% =

      $3,000,000 * 0.3118 =$935,400

The proceeds (issue price) of the bonds = PV of interest + PV of maturity value =

      $2,408,679 + $935,400 =$3,344,079