a $500,000 bond issue sold at 101, therefore, the bonds:

1. sold at a premium because the stated rate of interest was lower than the effective rate

2. sold for the 500,000 face amount plus $5,000 of accrued interest

3. sold at a discount bucause the effectice interest rate was lower than the face rate

4. sold at a premium because the stated rate of interest was higher than the yield rate