Common use of Discount upon issuance Clause in Contracts

Discount upon issuance. (1) If bonds are issued by a corporation at a dis- count, the net amount of such discount is deductible and should be prorated or amortized over the life of the bonds. For purposes of this section, the amor- tizable bond discount equals the excess of the amount payable at maturity (or, in the case of a callable bond, at the earlier call date) over the issue price of the bond (as defined in paragraph (b)(2) of § 1.1232–3).