Serenity Company issued $100,000 of 6%, 10-year bonds when the market rate of interest was 5%. The proceeds from this bond issue were $107,722. Using the effective interest rate method of amortization, which of the following statements is true? Assume that interest is paid annually.

a.Interest payments to bondholders each period will be $6,464.

b.Interest payments to bondholders each period will be $5,000.

c.Amortization of the premium for the first interest period will be $614.

d.Amortization of the premium for the first interest period will be $1,464.