Choice "C" is correct. Because the stated rate of interest is less than the effective interest rate when the bond is issued, this bond is issued at a discount. When the first interest payment is made, the discount is amortized. The discount amortization will increase interest expense for the period so that interest expense exceeds the interest payment to bondholders.
Choice "a" is incorrect. Interest expense is less than the cash payment made to bondholders when a bond premium is amortized. This bond was issued at a discount, not a premium, because the stated rate was less than the effective interest rate when the bond was issued.
Choice "b" is incorrect. When the bond is issued, the bond discount account is debited. When the first interest payment is made, the bond discount will be amortized. Discount amortization is recorded by crediting, not debiting, the bond discount account.
Choice "d" is incorrect. This bond was issued at a discount, not a premium, because the bond was issued when the stated rate was less than the effective interest rate.