Answer:
Debit Bond Interest Expense $22,000; credit Cash $22,000
Step-by-step explanation:
The interest payment on the bonds is based on the face value of the bond and coupon interest rate of the bond. If interest is paid semiannually the coupon annual rate should also be calculated for 6 months to calculate the semiannual payment.
As per given data
Face value = $550,000
Coupon Rate = 8% annually
Coupon rate = 8% / 2 = 4% semiannually
Semiannual payment of interest = Face value x Coupon rate
Semiannual payment of interest = $550,000 x 4%
Semiannual payment of interest = $22,000