A Company Issued 8%,15-Year Bonds with a Par Value of $550,000

Multiple Choice

A company issued 8%,15-year bonds with a par value of $550,000 that pay interest semi-annually.The current market rate is 8%.The journal entry to record each semiannual interest payment is:

A) Debit Bond Interest Expense $22,000;credit Cash $22,000.
B) Debit Bond Interest Expense $44,000;credit Cash $44,000.
C) Debit Bond Interest Payable $22,000;credit Cash $22,000.
D) Debit Bond Interest Expense $550,000;credit Cash $550,000.
E) No entry is needed,since no interest is paid until the bond is duE.$550,000 * .08 * ½ year = $22,000