“And honored among wagons I was prince of the apple towns.”
This line contains examples of INTERNAL RHYME. The first option is correct.
The poetic device internal rhyme may be defined as metrical lines in which its middle words and its end words rhymes with each other.
There are three types of internal rhyme:
A word at the end of a line rhymes with one or more in the middle of the following line
Two or more rhyming words within the same line
Two or more rhyming words in the middle of two different lines or may be in more lines.