On January 1 of this year, Victor Corporation sold bonds with a face value of $1,600,000 and a coupon rate of 10 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1)

1. Record the issuance of the bonds.

2. Record the interest payment on June 30, using straight-line amortization.

3. What bonds payable amount will Victor report on its June 30 balance sheet? VICTOR CORPORATION Balance Sheet (Partial) At June 30 Long-term liabilities