A company issued 8%, 15-year bonds with a par value of $550,000 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 $22,000; credit Cash $22,000.

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

• Debit Bond Interest Payable $22,000; credit Cash $22,000.

• Debit Bond Interest Expense $44,000; credit Cash $44,000.

• Debit Bond Interest Expense $550,000; credit Cash $550,000.