How does a pencil bend it water?

This was the question we had to answer for our science experiment.  Our challenge was to bend a pencil without breaking it.

What did we do?
We filled a jar with water and put the pencil in it.

What did we think would happen?
-the pencil would turn grey
-the pencil would look big

What happened?
The pencil looked bent when we looked at it from the side because the light passing through water made the pencil look bent.