if a debt instrument is acquired from an issuer for an amoun

if a debt instrument is acquired from an issuer for an amount less than what the issuer will have to pay the holder when the instrument matures,the difference is A) bond premium B) bond acquisition premium C) market discount D) original issue discount

Solution

Discount bond is a bond that is issued for less than the par value of bond at the time of issue and repaid at par value of the bond.

So answer is Option d) Original issue discount.

A premium bond is one which is issued at more than the par value and repaid at par value of the bond.