Classical algebraic specification is an accepted framework for specification. A criticism which applies is the fact that it is functional, not based on a notion of state as most software development and implementation languages are. We formalise the idea of a state-based object or abstract machine using algebraic means. In contrast to similar approaches we consider dynamic logic instead of equational logic as the framework for specification and implementation. The advantage is a more expressive language allowing us to specify safety and liveness conditions. It also allows a clearer distinction of functional and state-based parts which require different treatment in order to achieve behavioural abstraction when necessary. We shall in particular focus on abstract behaviour and observation. A behavioural notion of satisfaction for state-elements is needed in order to abstract from irrelevant details of the state realisation.