The carrying amount of bonds will equal the market price
A)at the close of every trading day.
B)at the end of the fiscal period.
C)on the date of issue.
D)every six months on the date interest is paid.

Question

Quizplus · Accepted Answer

The carrying amount of bonds will equal the market price on the date of issue, as that is the point at which the bond's issuer receives the proceeds from the bond issuance and the investor initially pays the market price. After that point, factors such as changes in market interest rates and credit risk can cause the market price to fluctuate, which will result in a carrying amount that is different from the initial market price.

The Carrying Amount of Bonds Will Equal the Market Price