On June 30, 2006, Athens Company issued $1,500,000 of 10-year, 8% bonds, dated June 30, for $1,540,000. The bonds were purchased by Palermo Co. on the issue date at the issue price. Present entries to record the following transactions:
(a) Athens Company:
(l) Issuance of bonds.
(2) Payment of first semiannual interest on December 31, 2006.
(3) Amortization by straight-line method of bond premium on December 31, 2006.
(b) Palermo Company:
(1) Purchase of bonds.
(2) Receipt of first semiannual interest amount on December 31, 2006.
(3) Amortization by straight-line method of bond premium on December 31, 2006.