Held-to-maturity investments in bonds are initially reported at ________ on the purchase date.On a subsequent balance sheet date,the bonds are reported at ________.
A)cost;fair value.
B)amortized cost;fair value.
C)cost;amortized cost.
D)cost;lower of cost or market.

Question

Quizplus · Accepted Answer

Held-to-maturity investments in bonds are initially reported at cost on the purchase date and on a subsequent balance sheet date, they are reported at amortized cost. This is because held-to-maturity investments are debt securities that the company intends to hold until maturity, and they are accounted for using the amortized cost method. This method involves recognizing interest income and amortizing any premium or discount over the life of the bond, which results in a carrying value equal to the initial cost on the purchase date. Therefore, the correct answer is option C.

Held-To-Maturity Investments in Bonds Are Initially Reported at ________ on the Purchase