How to Cut an Object Using Knife Project in Blender 2.77

Setting Up the Object

1. 
   Add a new cube by pressing ⇧ Shift+A » Mesh » Cube.
2. 
   Continue to add a new circle by pressing ⇧ Shift+A  » Mesh » Circle.
3. 
   Press the R key, hit the X key and type 90 to rotate the circle 90 degrees around the x-axis.
4. 
   Switch from the Perspective View Mode (persp) to the Orthographic View Mode (ortho). You can do this by pressing the Numpad 5 key.
5. 
   Press the Numpad 1 key to view from the front of the cube.
6. 
   Press G to move the circle to the center of the cube. Then press S to scale the circle.
7. 
   Press A to deselect all visible objects in scene. Hold down the ⇧ and right click on the circle first. Then right click on the cube.
8. 
   Switch from Object Mode to Edit Mode by pressing Tab ↹. In the Tool Shelf panel, select Tool » Knife Project. Press T to open the Tool Shelf panel if you don't see it.

=== Making the Cut ===

Method 1: Using Cut-Through

1. 
   Select the Cut through option in Knife Project. This will cut both two sides of the cube.
2. 
   Press the Delete key » Faces to cut holes in the cube.