Question: Assume the same facts as in E8 7 but prepare entries

Assume the same facts as in E8-7 but prepare entries using straight-line amortization of bond discount or premium.
In E8-7
Able Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $400,000 of Able's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime owns 60 percent of Able's voting common stock.

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  • CreatedMay 23, 2014
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