Individual bonds vs a bond fund

Introduction
Vanguard Investment Counseling and Research has a detailed discussion.

If you buy individual bonds, you pay no management costs, and you can control your allocation precisely; a fund has a management fee, and has an allocation set by the manager. However, you will pay a commission to buy bonds, unless you buy Treasury bonds from Treasury Direct, and another commission to sell before maturity. Bond funds also have trading costs not reflected in their expenses, but the costs are likely to be very low. And the costs of the funds themselves can also be low; Vanguard's bond funds have expenses of about 0.2% for Investor shares and 0.1% for Admiral shares.

But the main advantages of bond funds are diversification and liquidity. A corporate-bond fund can be diversified; it is much harder for an individual investor to hold a diversified portfolio of corporate bonds. (Diversification is irrelevant for Treasuries, which have no credit risk.) You can buy and sell a bond fund in any amount, and reinvest interest payments in the fund; if you hold individual bonds, you can only sell a whole bond, and any interest received cannot be automatically reinvested unless it is enough to buy a new bond.

Lower Ongoing Costs
Once you purchased the bonds, there is no ongoing management fee, because effectively you have become the manager for your own bond portfolio.

Convenience

 * Buy or sell at any time at any amount. When you invest in a bond fund, you can buy or sell additional shares at any time at any amount. There is usually no transaction fee for buying or selling additional shares. If you have a portfolio of individual bonds, additional purchases and sales on the secondary market may be subject to a commission and bid/ask spread.
 * Reinvest distributions automatically. If you invest in a bond fund in an IRA or if you don't need income from your investment, distributions from a bond fund can be reinvested automatically. If you invest in a portfolio of individual bonds, you must find new bonds for the interest payments.
 * Tax reporting (taxable accounts only). If you invest in a bond fund in a taxable account, you receive tax forms from the bond fund company. If you have a portfolio of individual bonds, you receive tax forms from TreasuryDirect or your brokerage account listing the tax-related items for each bond. It's easier to figure out the tax reporting for one bond fund versus many individual bonds.