Answer:
Dr Interest expense $33,500
Cr Discount on bonds payable $1,100
Cr Cash $32,400
Explanation:
Discount on bonds payable=$540,000-$529,000=$11,000
Amortization of discount=discount on bonds issue/period of the bond
period to maturity of the bond is 5 years *2 =10 since the bond pays interest semi-annually
Amortization =$11,000/10=$1,100
Semi-annual interest=$540,000*12%/2=$32,400
the bond semi-annual interest expense=discount amortization+interest payment
the bond semi-annual interest expense=$32,400+$1,100=$33,500
