Kingbird, Inc. issues $261,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2022.

The journal entry is shown below:

Cash A/c Dr $255,780 ($261,000 * 98%)

Discount on bonds payable A/c $5,220

To Bonds payable A/c $261,000

(Being the issuance of the bond is recorded)

We assume the par value is $100 but the bond is issued less than the par value i. e $98 so the difference would be debited to the discounts on bond payable