Final answer:
The value of the bond on the company's balance sheet at the time of redemption will be equal to the face value, as the original issue discount has been fully amortized over the life of the bond.
Step-by-step explanation:
When a commercial company issues bonds at a discount of the face value, it means that the bonds are sold for less than their nominal or face value. As the bond approaches its redemption or maturity date, the value of the bond on the company's balance sheet is gradually adjusted upwards through a process called amortization. This amortization reflects the gradual increase in the bond's book value as it gets closer to the maturity date, where it will be redeemed for its full-face value.
Therefore, at the time of redemption, the value of the bond on the company's balance sheet will be equal to the face value of the bond. This is because the discount at which the bond was originally issued has been fully amortized over the life of the bond. Following this logic, any premium (when a bond is sold above the face value) would have been amortized down to the face value at the time of redemption.