Begin the process by removing the baseboard molding (figure A) from the walls where the wood cleats will be attached. The headboard and sideboard of the bed are to be flush with the wall. Remove the molding using a pry-bar, saw and chisel.
Measure out from the wall paneling and mark for the placement of the wall cleats. Placement of the cleat closest to the paneling should allow for a 3/4" gap between the cleat and edge of the paneling. The gap will allow room for the decorative post that will be added later. Fasten the cleats to the wall using construction adhesive and finishing nails. Repeat the steps on the opposite end of the bed.
With the cleats installed, position the headboard unit in place and attach it to the cleats (Image 1). Corner molding can be added where the bed meets the paneling (Image 2). Install the molding with finishing nails to achieve a clean, decorative finish. Attach the foot-board section to the cleats at the opposite end by toe-nailing with finishing nails. With the headboard and foot-board in place, position the center panel (Image 3) and attach it directly to the wall using finishing nails.
Position the first bottom side-rail on the center panel, and use a carpenter's level to ensure that it is perfectly level. Use wood shims to hold the side-rail in position and level, and attach the side rail to the frame of the bed using a surface-mounted bed-rail bracket (Image 1). Fasten the bracket to the frame and rail using wood screws. Repeat the process for the second (outer) bottom rail, taking into consideration the width of the bed slats (Image 2). Repeat the steps for installation of the two rails for the top bunk (Image 3).