I do want to add that bugs can also be found when the application is rolled out to production.  This is usually a production problem (which is a break/fix). 

Whatever your process for handling bugs needs to be followed to resolve the issue(s).

If a bug is found we need to communicate it with our team and "open" a new defect report- assign it to the person (developer) who can fix it(who developed the code). Once the bug status is "fixed" we can go ahead and retest it back for defects and once it is defects free or bug free, the test case is said to be "Pass" else if you find defect again "reopen" the defect. Test untill its bug free(Cycle repeat).  

Bug life cycle describe the status of the bug.It include following phases:

New:Find the bug

Open:Sent to developer

fix: rectify by developer

Retest/Reopen:If the bug is not fixed then it will again sent to developer for fixation

Closed:Bug is Fixed the closed.

Bug Life Cycle conistsof the phases-that the bugs have while doing testing. Like as follows:-

New
Open
Closed
Reopen
Fixed
Test
Validate

there is no peroid of life time