Bond Sale from Parent to Subsidiary (Straight-Line Method):

Lamar Corporation owns 60 percent of Humbolt Corporations voting shares. On January 1, 20X2, Lamar Corporation sold $150,000 par value, 6 percent first mortgage bonds to Hunbolt for $156,000. The current market interest rate is 5.475 percent. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Prepare entries using straight line amortization of bond discount or premium.