[header] How to account for bonds [title] Set up a bonds payable account. [step] When a corporation issues a bond, they are essentially taking out loans from bondholders. The bond issuer must then make accounting entries to recognize the receipt of cash and the amount owed to bondholders. 
The amount owed back to bondholders at maturity is recorded in an account called bonds payable. Open or update this account to record bond entries.