I am working on bonds payable and I dont know how to do the entry can you help?

Question

The problem states that there is issued an $8,000,000 of 5-year, 8% callable bonds dated July 1, 05, at an effective rate of 10%, receving cash of $7,382,236. Intrest is payable semiannually on decemeber 31 and june 30.

Answer 1

Assuming your company is the one issuing the bond, try this -

DR Cash $7,382,236
DR Bond Discount Expense 617,764
CR Bonds Payable $8,000,000

No need for an interest payable entry till it is due.

Let me know if this helps. They sometimes put in a whole mess of extra info you need to know eventually, but not to make the initial entry.