The appropriate way in TurboTax Business program to report Form 1099-OID (or frequently the OID for tax-exempt is not reported on a separate Form 1099-OID) is make entries as if two separate Form 1099-INT were received, as this software does not have a separate interview entry for OID.
Original Interest Discount (OID) occurs when a firm issues an instrument of indebtedness (bond/note) at a price below its maturity price so that holding the investment to maturity yields an otherwise unreported increase in interest income. Further, since a note or bond can be traded/sold in the secondary market, the tax accounting calls for the value of that amount of "excess-redemption value" to be recognized yearly as if the holder had actually received an interest payment in that amount. At redemption there should be zero gain or loss.
@stevepaa
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