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Which of the statements is correct on january

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Problem 1: A five-year, $250,000 bond was issued on January 1, 2016. The coupon rate of interest was 10%, and the market rate was 8%. The interest is paid semiannually. Which of the following statements is correct?

Option 1: The bond was issued at a discount, and the annual interest expense is 25,000.

Option 2: The bond was issued at a premium, and the annual interest expense is $25,000.

Option 3: The bond was issued at a premium, and the semiannual cash payment is $12,500.

Option 4: The bond was issued at a premium, and the semiannual cash payment is $12,500.

Reference no: EM132945222

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