On January 1, 2016, Whitefeather Industries issued 800 $1,000 face value bonds. The bonds have a(n) five-year life and pay interest at the rate of 6%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 6%.

Use the appropriate present value table:

PV of $1 and PV of Annuity of $1

Required:

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1. Calculate the issue price of the bonds and record the issuance of the bonds on January 1, 2016.

Round your answer to the nearest $1,000. For example, $296,987 would be entered as $297,000.

Record the issuance of the bonds on January 1, 2016.

Explain how the issue price would have been affected if the market rate of interest had been higher than 6%.

Prepare the journal entry to record the payment of interest on July 1, 2016.

Calculate the amount of interest accrued on December 31, 2016. If required, round your answer to the nearest dollar.