On January 1, 2001, Dale Industries issued 10-year term bonds with a par value of $800,000, and a coupon rate of 7%, to unrelated parties at 103. Interest is paid semi-annually on June 30 and December 31. Dale's subsidiary, Martin Technologies, acquired one half of the bonds at 97 on July 1, 2003, and plans to hold them to maturity. Both companies use the straight-line method to amortize any bond premium or discount.

Required:

Prepare all elimination entries related to the intercompany debt that would appear in the three-part workpapers to prepare consolidated financial statements for the years 2003 and 2004.