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A bond is a debt security. It is lending money to a corporation, government or another entity issuing the bond. As compensation for the loan you receive interest at a specified rate. The interest may be paid either at specific periods in the life of the bond or when the bond matures. The bond/loan principal is repaid at maturity.
Because a bond is debt (as opposed to equity), it is generally considered a safer investment in stock of the same company, though low-cost high-risk bonds do exist (often referred to as "junk bonds"). Bond Discounts refer to the difference in the market price of the bond over the face value (which often happen when interest rates change). The full face value is still repaid to the bond holder at the end of the life of the bond.
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