Answer:
greater than both the current yield and the coupon rate.
Explanation:
A discount bond is a bond that at the point of issuance, it's less than its face or par value.
When a bond is trading for less than its face value in the market, it's known as a discount bond.
The yield to maturity on a discount bond is greater than both the current yield and the coupon rate. This simply means that the coupon rate is usually lower than the yield to maturity of the discount bond.
Additionally, the yield to maturity can be defined as the bond's total rate of return required by the secondary market while the coupon rate is defined as the annual interest of a bond divided by its face value.
For instance, when a bond is issued at a par or face value of $5,000, at maturity the investor would be paid $5,000. But because bonds are being sold before its maturity, it would trade below its face value.
Hence, a bond with the face value of $5,000 could trade for as low as $4,800, thus making it a discount bond.
Answer:
DR Cash $589
DR Credit Card expense $31
CR Sales $620
<em>(To record sales via credit card)</em>
<u>Working</u>
Cash
= 620 * ( 1 - 5%)
= $589
Credit Card Expense
= 620 * 5%
= $31
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Assuming the user took advantage of this offer, the amount that would be discounted on a $10,000 invoice is: $200.
<h3>
Discounted amount </h3>
Using this formula
Discounted amount =Discount rate× Invoice
Let plug in the formula
Discounted amount=2%×$10,000
Discounted amount=$200
Therefore assuming the user took advantage of this offer, the amount that would be discounted on a $10,000 invoice is: $200.
Learn more about Discounted amount here:brainly.com/question/12965533
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