The carrying value of bonds will equal the market price

Question

Quizplus · Accepted Answer

The carrying value of bonds is the book value of the bonds and is calculated as the face value of the bonds less any unamortized discounts or plus any unamortized premiums. This value is determined on the date of issuance and remains constant until the bonds are either redeemed or sold. The market price of the bonds, however, may fluctuate depending on market conditions and investor demand. Therefore, it is not necessary for the carrying value to equal the market price at any specific time, such as at the close of every trading day or every six months on the payment date.

The Carrying Value of Bonds Will Equal the Market Price