Bond Issue Price
Present Value Measurement
The issue price of a bond equals the present value of future cash flows, including periodic interest payments and the principal repayment at maturity, discounted using the market interest rate.
Issue Price = Present Value of Interest Payments + Present Value of Principal
Note
Present value calculations are fundamental to CPA FAR bond accounting.
Summary
Bond prices reflect the present value of future contractual cash flows discounted at the market rate.