On July 1, 2013, $1.0 million face amount of 8%, 12-year bonds were issued. The bonds pay interest on an annual basis on June 30 each year. The market interest rates were slightly higher than 8% when the bonds were sold.

A. How much interest will be paid annually on these bonds?

b. Were the bonds issued at a premium or discount?

c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year?