The carrying value 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 issuance.
D) every six months on the date interest is paid.

Question

Quizplus · Accepted Answer

The carrying value of bonds is the amount recorded in the issuer's financial statements as the outstanding balance of the bond liability. This amount is determined at the time of issuance and remains constant, regardless of changes in the bond's market price. Therefore, the carrying value of bonds does not change with fluctuations in the bond's market price and is not affected by any trading activity or interest payments. The carrying value of bonds is the amount reported on the balance sheet and is determined at the time of issuance. It includes the face value of the bond plus any premium or discount. This value is not adjusted every day, at the end of the fiscal period, or when interest is paid. It remains the same over the life of the bond, unless there is a change in the terms or conditions of the bond. The market price of a bond can fluctuate based on changes in interest rates, credit rating of the issuer, and other market conditions, but this does not affect the carrying value of the bond on the company's balance sheet. Therefore, the best choice is C – on the date of issuance.

The Carrying Value of Bonds Will Equal the Market Price