Describing bonds and journalizing transactions for bonds payable using the straight-line amortization method

This problem continues the Daniels Consulting situation from Problem P11-35 of Chapter 11. Daniels Consulting is considering raising additional capital. Daniels plans to raise the capital by issuing $500,000 of 8%, seven-year bonds on January 1, 2017. The bonds pay interest semiannually on June 30 and December 3t On January 1, 2017, the market rate of interest required by investors for similar bonds is 10%.

Requirements

1. Will Daniels's bonds issue at face value, a premium, or a discount?

2. Calculate and record the cash received on the bond issue date.

3. Joumalize the first interest payment on June 30 and amortize the premium or discount using the straight-line amortization method. Reference Accounting for liabilities of a known amount