A bond sold at a discount will pay total cash payments for interest that is more than the total interest expense recognized over the period the bond is issued.

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A bond sold at a discount will have a lower total cash payment for interest than the total interest expense recognized over the period the bond is issued. The discount represents the difference between the initial offering price and the face value of the bond, meaning that the issuer will receive less cash upfront but will pay less in interest expense over the life of the bond.

A Bond Sold at a Discount Will Pay Total Cash