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On January 1, 2012, P & P Products purchased $1,000,000 ofthe five year, 8% bonds Delta Products in the open market for$960,00. Delta Products is a wholly-owned subsidiary of P & PProducts. THe bonds are dated and were issued by Delta Products onJanuary 1, 2010. The bonds pay interest every January 1st and July1st. The effective interest method is used for amortizationpurposes. The market rate is 10%.

Required: Make any necessary entries on Delta Productsbooks.

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Prepare an amortization schedule that determines interest at theeffective interest rate.

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