On January 1, 2011, Ultimate Butter Popcorn issued $500,000 of 5%, 10-year bonds at a premium. The company issued these bonds for $540,878, since the market interest rate was 4%. Interest is paid semi-annually every June 30 and January 1". What is the journal entry recorded on June 30, 2011, for the investment payment?

I am confused on if the intrest expense would come from the face value or from the market value- please explain