Wayne Company issued bonds with a face value of $600,000, a 6% stated rate of interest, and a 10-year term.

Wayne Company issued bonds with a face value of $600,000, a 6% stated rate of interest, and a 10-year term. The bonds were issued on January 1, 2016, and Wayne uses the straight-line method of amortization. Interest is paid annually on December 31.

If Wayne issued the bonds for 96,

 a

the market rate of interest was lower than the stated rate of interest.

 b

the market rate of interest was equal to the stated rate of interest.

 c

the bonds carried a variable or floating rate that changed in response to market conditions.

 d

the market rate of interest was higher than the stated interest rate.