X Corp issues a bond on March 1, 2014 with a maturity date of February 28, 2024. The redemption amount is 100,000 and the bonds were issued to the public. The first price paid for the bond was $55,000 but most of the bonds issued sold for $50,000. The annual yield to maturity on the bond is 10%. The bonds do not have a coupon. Assume that B bought the bond on the date it was issued for $50,000.

a. Does this bond have original issue discount?

b. What is the bond’s issue price?

c. If B is an accrual basis taxpayer, how much income does B derive in 2014 with respect to the bond?

d. If B is a cash basis taxpayer, how much income does B derive in 2014 with respect to the bond?

e. In computing original issue discount, does every owner of the bond begin the calculation using the same issue or revised issue price?