Hornbeck Company issued $100,000 bonds payable with a 7% interest rate at a price of 97. The journal entry to record the issue of the bond includes:

Name: Hornbeck Company issued $100,000 bonds payable with a 7% interest rate at a price of 97. The journal entry to record the issue of the bond includes:
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The bonds were issued at 97, which means they were issued at a discount. The discount is $100,000 - $97,000 = $3,000, so a debit to Discount on Bonds Payable for $3,000 is needed.

Hornbeck Company Issued $100,000 Bonds Payable with a 7% Interest