Live Nation Inc. issued $1,500,000 of 6 percent, 10-year bonds payable and received cash proceeds of $1,388,419 on March 31, 2017. The market interest rate at the date of issuance was 7 percent, and the bonds pay interest semi-annually.

1. Did the bonds sell at a premium or a discount?

2. Prepare an effective-interest amortization table for the bond discount through the first two interest payments. Use Exhibit 15-5 as a guide, and round amounts to the nearest dollar. Students can use a financial calculator if so instructed.

3. Record Live Nation Inc.'s issuance of the bonds on March 31, 2017, and payment of the first semi-annual interest amount and amortization of the bond discount on September 30, 2017. Explanations are not required.

4. If we were to amortize the bond discount using the straight-line method instead of the effective-interest method, record the first interest amortization entry.