The Carrying Value of Bonds Will Equal the Market Price

question 61

Multiple Choice

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.

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Definitions:

Available-for-Sale Debt Securities

Debt investments not classified as held-to-maturity or trading securities, recorded at fair value on the balance sheet with unrealized gains or losses reported in other comprehensive income.

Fair Value

An estimate of the market price of an asset or liability, reflecting the value for which it could be bought or sold in a current transaction between willing parties.

Fair Value Adjustment

A financial accounting process of adjusting the book value of an asset or liability to reflect its current market value.

Stock Investments

The purchase of shares in a company, representing ownership interests and the potential for income through dividends and capital appreciation.