Final answer:
Investments in debt securities are recorded on the date of acquisition at the cost incurred to purchase them, which includes the security's price and additional fees.
Step-by-step explanation:
Investments in debt securities should be recorded on the date of acquisition at cost plus brokerage fees and other costs incidental to the purchase. Investments in debt securities should be recorded on the date of acquisition at lower of cost or market. This means that the securities should be recorded at the lower of their cost or their market value at the time of acquisition.
This is because the acquisition cost represents the actual amount paid to obtain the securities, which includes the price of the security itself as well as any additional costs required to complete the transaction, such as brokerage fees. This approach is in line with the historical cost principle in accounting, which dictates that assets should be recorded at their original cost. It is important to note that the cost is different from the maturity value, which is the amount the bond will be worth at maturity, or the market value, which can fluctuate based on current interest rates and market conditions.