Entity-Relationship (ER) modeling plays a major role in relational database design. The data requirements are conceptualized using an ER model and then transformed to relations. If the requirements are well understood by the designer and then if the ER model is modeled and transformed to relations, the resultant relations will be normalized. However the choice of modeling relationships between entities with appropriate degree and cardinality ratio has a very severe impact on database design. In this paper, we focus on the issues related to modeling binary relationships, ternary relationships, decomposing ternary relationships to binary equivalents and transforming the same to relations. The impact of applying higher normal forms to relations with composite keys is analyzed.We have also proposed a methodology which database designers must follow during each phase of database design.