If a company records its bonds payable at fair value, and the market price of the bonds rises, the company will record a loss.

Name: If a company records its bonds payable at fair value, and the market price of the bonds rises, the company will record a loss.
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Question

Quizplus · Accepted Answer

When the market price of bonds rises, the fair value of the liability increases, leading to a loss for the company as it reflects a higher obligation.

If a Company Records Its Bonds Payable at Fair Value