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Mr.Rice...IRS & OID Review

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BeverlyD

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This long-term debt instrument has Original Issue Discount (OID) when it is issued for a price less than its stated redemption price at maturity (principal amount). The OID is the difference between the stated redemption price at maturity and the issue price. OID is considered to be a form of interest. All debt instruments that pay no interest prior to maturity (zero coupon bonds) are presumed to be issued at a discount. The majority of OID bonds are zero coupon bonds. However, it is possible for a bond making periodic coupon payments to also have OID......Listen and Learn

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