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 bond is issued at a discount, so the Discount on Bonds Payable account is debited for the difference between the face value and the cash received, which is $3,000 ($100,000 - $97,000).

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