Assume the same facts as in E8-7 but prepare entries using straight-line amortization of bond discount or

Question:

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 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.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...