Chang Corporation issued $6,000,000 of 9%, ten-year convertible bonds on July 1, 2020 at 104 plus accrued interest. The bonds were dated April 1, 2020 with interest payable April 1 and October 1. Bond premium is amortized semiannually on a straight-line basis. On April 1, 2021, $1,200,000 of these bonds were converted into 500 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion.

What was the effective interest rate on the bonds when they were issued?

9%

Above 9%

Below 9%

Cannot determine from the information given.