Red Corp issued $1,000,000, 5%, 10 years bonds with annual interest payments on January 1, 2012 when the market rate of interest was 7%. Which of the following statements is true?

1. At the end of 10 years, the amount of total interest expense on the bond issue will be $500,000.

2. The amount of premium or discount amortized each year is decreasing.

3. The cash interest payment is increasing each year of the bonds life.

4. The amount of interest expense recorded each year is decreasing over the life of the bond.

5. The carrying value of the bond is more than $1,000,000.

Group of answer choices

1, 4, 5

2, 3, 5

1, 2, 3, 4

2, 3, 4, 5

None of the above.