Is the face value of a bond always 1000?
Sarah Garza
Updated on February 10, 2026
Par value is the face value of a bond. The market price of a bond may be above or below par, depending on factors such as the level of interest rates and the bond’s credit status. Par value for a bond is typically $1,000 or $100 because these are the usual denominations in which they are issued.
When the price of a bond is above the face value the bond is said to be?
The price you get for the bond before it matures is known as its market price. When the price of a bond goes above its face value, it is said to be a premium bond. When the price is below its face value, it is known as a discount bond.
Which type of bond is sold at face value?
The journal entry to record bonds that a company issues at face value is to debit cash and credit bonds payable. So if the corporation issues bonds for $100,000 with a five-year term, at 10 percent, the journal entry to record the bonds is to debit cash for $100,000 and to credit bonds payable for $100,000.
How is the face value of a bond related to the market value?
Depending on market conditions, the face value and market value may have very little correlation. In the bond market, interest rates, compared to the bond’s coupon rate, may determine if a bond sells above or below par.
What does par mean in the bond market?
Short for “par value,” par can refer to bonds, preferred stock, common stock or currencies, with different meanings depending on the context. Par most commonly refers to bonds, in which case it means the face value, or value at which the bond will be redeemed at maturity.
What do you need to know about face value?
Face Value 1 Understanding Face Value. In bond investing, face value (par value) is the amount paid to a bondholder at the maturity date, as long as the bond issuer doesn’t default. 2 Face Value vs. Market Value. 3 Frequently Asked Questions. What is face value? …
What happens when a bond is sold at a discount?
For example, if interest rates are higher than the bond’s coupon rate, then the bond is sold at a discount (below par). Conversely, if interest rates are lower than the bond’s coupon rate, the bond is sold at a premium (above par).
