Why do companies let themselves be taken for a ride by creditors? When I received my annual report from Paul Industries, I noticed that they had financed an expansion with a bond issuance in the past year. However, the cash received from the issue was quite a bit less than the face value of the bond (on a $100,000,000 issue they received only about 77.4% of face value). Why wouldn't a company wait to sell the bonds until they could receive the face value (or at least something close to it) of the bonds?

The disclosures in the balance sheet state that the bond issue carries a 9% interest rate, bondholders are paid interest twice a year, and the maturity date is February 15, 2035. The liability section of the balance sheet reports a discount on bonds payable of $22,136,505, yet the footnotes indicate the face value of the bond is $100,000,000. Why is this inconsistent?

When I purchase merchandise and pay cash I am granted a discount of 2% or 3%. I assume this reduces the sales revenue booked by the retailer on the transaction. Yet, I don't see any revenue reduction reported for Paul Industries for this discount. I'm concerned because this discount is about seven times the net income reported for the year. When they correct the books, the company will have a significant loss. Should I sell my stock now to avoid the downturn when the correct financial statements are published?