# On January 1, 2014 Victory Falls Company issued \$2,100,000 in bonds that mature in 5 years . The bonds have a stated interest rate of 8% and pay…

On January 1, 2014 Victory Falls Company issued \$2,100,000 in bondsthat mature in 5 years. The bonds have a stated interest rate of 8% and pay interest quarterly each year.  When the bonds were sold, the market rate of interest was 6%. These bonds, when issued and sold, contained a call feature, which allowed the company to retire the bonds early, if they elected, for a one-time payment equal to 1% of the book value at the time of retirement.

Required:

A. Were the bonds issued at a discount, at a premium, or at par? Since the market rate lower than coupon rate, the bond is premium

B.  What was the issue price on January 1, 2014?  Provide the journal entry to record the issuance of the bonds.

C.  Construct two amortization schedule tables, one using the straight-line method and one using the effective-interest method, showing each quarterly payment (in a table using Excel or Word).

D. Provide the adjusting journal entries to record interest expense on June 30, 2014, and December 31, 2014 using the straight-line method.

E.  Provide the two adjusting journal entries from part D using the effective-interest method.

F.  What is the book value of the bonds on June 30, 2014 and December 31, 2014 using straight-line method?

G. What is the book value of the bonds on June 30, 2014 and December 31, 2014 using effective-interest method?

H. Victory Falls Company elected to retire the bonds early on June 30, 2015, after the final interest payment.  Give the journal entries to record the interest expense on June 30, 2015 first, and then the retirement of bonds using the effective interest method.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
• 24/7 support
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
• Expert Proofreading
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

### Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

### Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Order your essay today and save 10% with the coupon code: best10