Several years ago Absalom, Inc., sold $800,000 in bonds to the public. Annual cash interest of 8 percent ($64,000) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2009, McDowell Corporation (a wholly owned subsidiary of Absalom) pur¬ chased $100,000 of these bonds on the open market for $121,655, a price based on an effective interest rate of 6 percent. The bond liability had a book value on that date of $668,778. What con¬ solidation entry would be required for these bonds on LO4

a. December 31,2009?

b. December 31,2011?