Bonds Payable at Discount
Illustrative Entries
| 1-1-X1 |
Cash |
92,278 |
||
| Discount on Bonds Payable |
7,722 |
|||
| Bonds Payable |
100,000 |
|||
| To record issuance of 100, 8%, 5-year bonds at discount | ||||
| periodically |
Interest Expense |
4,772 |
||
| Discount on Bonds Payable |
772 |
|||
| Cash |
4,000 |
|||
| To record interest payment (this entry occurs on every interest payment date at 6 month intervals) and amortization of discount |
| 12-31-X5 |
Bonds Payable |
100,000 |
||
| Cash |
100,000 |
|||
| To record payment of face value at maturity |