Account for the issuance of notes payable and bonds payable.

- The issue price of long-term debt is typically quoted as a percentage of face value.

- At the time of issuance the borrower records the face value of the debt in bonds payable (or notes payable).

- Any amount of cash received over the face value is credited to a premium account.

- Any amount of cash received under the face value is debited to a discount account.

- The bonds payable (or notes payable) is netted with the premium or discount when reported on the statement of financial position.