Commercial bond discount
This kind of discount means that the customer provides a commercial bond or withdrawals in order to recover the value of this bond before maturity date, and after a partial deduction of the bond’s value. The accrual interest of the bond’s discount starts from the date of payment to the maturity date in addition the commission.
Kinds of discounted bonds:
Drawn bond: the most common kind of bonds in which the originator is the drawer, and signs on the stamps and requires the drawee to deliver the payable amount. The drawer signs on the backside of the bond paper and the debtor signs either on the acceptance or localization paper.
promissory note: the debtor signs on the stamps and the localization paper, and the drawer signs on the backside of the bond paper only; not over the bond. The bond should not contain the word ‘accepted’ and the originator of the bond is the drawee, who pledges to pay the value of the bond to the drawer within the maturity date.