A $502,000 bond issue sold for $487,000. Therefore, the bonds:

Multiple Choice

• Sold at a premium because the stated interest rate was higher than the market rate.
• Sold for the $502,000 face amount less $15,000 of accrued interest.
• Sold at a discount because the stated interest rate was higher than the market rate.
• Sold at a discount because the market interest rate was higher than the stated rate.

X2 issued callable bonds on January 1, 2021. The bonds pay interest annually on December 31 each year. X2's accountant has projected the following amortization schedule from issuance until maturity: