Imai Company issued a $1.405 million bond that matures in five years. The bond has a 5 percent coupon rate. When the bond was issued, the market rate was 4 percent. The bond pays interest twice per year, on June 30 and December 31. Use Table 9C.1, Table 9C.2.

Required:

1. Record the issuance of the bond on June 30.

2. Was the bond issued at a discount or at a premium?