The difference between the face value and the selling price of a 10-year discounted bond issued two years after authorization, is amortized for

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The difference between the face value and the selling price of a discounted bond is known as a bond premium or discount. In the case of a discounted bond issued two years after authorization, the difference between the face value and the selling price is amortized for the remaining eight years of the bond's life. This means that the premium or discount is gradually added to or subtracted from the bond's value over eight years. This amortization process keeps the bond's interest expense in line with its book value.

The Difference Between the Face Value and the Selling Price