A company issued 8%, 15-year bonds with a par value of $580,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:

Multiple Choice

• Debit Bond Interest Expense $46,400; credit Cash $46,400.

• Debit Bond Interest Expense $530,000; credit Cash $530,000.

• Debit Bond Interest Expense $23,200; credit Cash $23,200.

• No entry is needed, since no interest is paid until the bond is due.

• Debit Bond Interest Payable $38,667; credit Cash $38,667.