Question

If a company purchases a bond with the expectation that it will be held until maturity, it will most likely be recorded on the balance sheet at:

Answer 1

Held-to-maturity securities are purchased to be owned until maturity. This type of security is reported as an amortized cost on a company's financial statements and is generally in the form of a debt security with a specific maturity date. Unlike held-for-trading securities, temporary price changes for held-to-maturity securities do not appear in corporate accounting statements. Instead, the interest income received from a held-to-maturity security is run through the income statement.