On July 1, 2014, Garden Works, Inc

On July 1, 2014, Garden Works, Inc. issued $300,000 of ten-year, 7% bonds for $303,000. The bonds were dated July 1, 2014, and semi-annual interest will be paid each December 31 and June 30. Garden Works Inc. uses straight-line amortization. Which of the following statements is incorrect?

A) The market rate of interest was less than the stated rate of interest on July 1, 2014.
B) The interest expense during the life of the bonds is $3,000 less than the cash interest payments during the life of the bonds.
C) The book value of the bond liability decreases by $300 per year.
D) The semi-annual interest expense is $300 less than the semi-annual interest payment.