On December 31, 2009, Alejandro Enterprises issued $25,000 worth of 5% bonds at 99. These are 10-year

Question:

On December 31, 2009, Alejandro Enterprises issued $25,000 worth of 5% bonds at 99. These are 10-year bonds with interest paid annually on December 31.
1. What are the interest payments for the first two years?
2. Was the market interest rate higher or lower than 5% at the date of issue?
3. Will the interest expense be higher or lower than the interest payment?