When a business issues financial bonds in order to raise capital, a bond payable liability account is created.
The corporation will return the bond amount over a long period of time because it is a long-term debt. The first two semi-annual interest payments on June 30 and December 31 of 2021, the bond issue on January 1, 2021, and the bond issuance.
Cash 429,678
Discount Payable 40322 on Bonds
470,000 Bonds Due
Discount on Bonds Due 333.9 Cash 21150 Interest Expense 21483.9
Discount on BP 351 Cash, Interest Expense 21501, and 21150
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