Final answer:
Held-to-maturity debt securities should be valued at amortized cost.
Step-by-step explanation:
All of the following statements regarding held-to-maturity debt securities are true except:
a. The debt securities should be valued at market value.
b. Interest income may be debited at the time of acquisition.
c. Premiums and discounts must be amortized over the remaining life of the bonds.
d. The realized gain or loss is the difference between their amortized cost and the proceeds from their sale.
The correct answer is a. Held-to-maturity debt securities should be valued at amortized cost, not market value. Market value is used for available-for-sale and trading securities. The other statements regarding interest income, premiums and discounts, and realized gain or loss are true for held-to-maturity debt securities.