Alli Kamal loaned Textron Corporation $1,000 in the form of a bond purchase. Textron must pay back the $1,000 on August 1, 2015. The $1,000 is known as which of the following?

Question

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The $1,000 is known as the principal. The premium amount refers to the additional amount paid above the principal, market value refers to the current value of the bond on the market, and book value refers to the value of an asset on a company's balance sheet.

Alli Kamal Loaned Textron Corporation $1,000 in the Form of a Bond