[jkhdigital]

When the bond matures it must be paid back, and the money that was created when the Fed purchased it is now destroyed as the Fed receives the bond principal.

If the bond is not paid back and the debtor defaults, well... this can't happen with US Treasuries because the fed is an arm of the government and will always roll over a bond. But if it happens with the corporate bonds that the Fed is buying, then the US Treasury is on the hook for the losses because by law the Fed cannot be impaired.