On July 1, 2019, Garden Works, Inc. issued $300,500 of ten-year, 7% bonds for $305,500. The bonds were dated July 1, 2019, and semi-annual interest will be paid each December 31 and June 30. Garden Works Inc. uses the straight-line method of amortization. Which of the following statements is incorrect?

• The interest expense during the life of the bonds is $5,000 less than the cash interest payments during the life of the bonds.

• The book value of the bond liability decreases by $500 per year.

• The semi-annual interest expense is $500 less than the semi-annual interest payment.

• The market rate of interest was less than the coupon rate of interest on July 1, 2019.