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...

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.