A company issues $1,000,000 of 8% bonds at 98. The discount is

A company issues $1,000,000 of 8% bonds at 98. The discount is

A company issues $1,000,000 of 8% bonds at 98. The discount is:

A. $0

B. $20,000

C. $80,000

D. $980,000

Answer: B

Explanation: Discount = Face value – Issue price = $1,000,000 – ($1,000,000 × 98%) = $20,000.