Business Finance
business and finance question

Question Description

Why do companies issue bonds? What is the determining factor of whether a bond is sold at a discount, face, or premium?  How are discounts and premiums recorded and shown on the balance sheet?

Final Answer

Bonds may be issued at face value and are a form of interested-bearing notes payable issued by corporations and unversities. Bonds, like common stock are usually sold in small denominations like in multiples of $1000 us dollars. Unsecured bonds are issued against the general credit of the borrower. While secured bonds have the specific assets of the issuer pledged as collateral bonds. The discount and payable bonds will always appear on the balance sheet showing that it has a discount and or it has been payed off.

Gabriel E (1551)
University of Virginia

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