The carrying value of bonds at maturity always equals:
A)the amount of cash originally received in exchange for the bonds.
B)the par value of the bond.
C)the amount of discount or premium.
D)the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.
E)the amount in excess of par value.

Question

Quizplus · Accepted Answer

The carrying value of bonds at maturity always equals the par value of the bond, which is the amount the issuer is obligated to pay back to bondholders upon maturity. This is because all discounts and premiums would have been amortized by then, and the bond would have been fully paid off for its face value. The amount of cash originally received in exchange for the bonds may have been different from the par value, depending on whether the bond was issued at a discount or premium, but this would not affect the carrying value at maturity.

The Carrying Value of Bonds at Maturity Always Equals