On April 1, 2020, Jackson Company issued $500,000 par-value bonds at an issue price of $520,000. Which of the following best explains why the bond was issued at a price higher than the par value?

• The stated rate of interest was equal to the market (effective) rate demanded for the bond

• The stated rate of interest was lower than the market (effective) rate demanded for the bond

• The stated rate of interest was higher than the market (effective) rate demanded for the bond

• Jackson Company has stable cash flow, so the company should be able to pay back the loan