Measure the log carefully and mark the inner and outer edges of the notch where the log will fit over the one below it. The log can be placed in position, marked against the log beneath and rolled half over to cut out the notch. The log can also be measured and notched on the ground, before being placed in position.
Cut away the wood between the marks, chipping at an angle and creating a curved surface. The notch should be at least one-third the thickness of the log, but no more than one-half. Alternatively, saw the wood at an angle on either side of the notch and chip away the wood with a chisel and mallet. This notch will not be as rounded as one made with an ax.
Position the log over the one beneath it, fitting the notch over the curved surface of the log. It should fit securely, but not perfectly. The wood will shrink and tighten as the logs dry, but chinking, or adding fill material or insulation, is still necessary for any style log house. If the gap between the two logs is more than an inch or if the fit is not what you want, turn the log again and cut away more wood with a hatchet or mallet and chisel until you get the fit you want.