Final answer:
The statement 'Bonds should be recorded at their face value at the time of issuance' is true. Bonds are recorded at face value as it represents the actual liability that the issuer agrees to repay at maturity.
Step-by-step explanation:
When considering the recording of bonds on the balance sheet at the time of issuance, the statement 'Bonds should be recorded at their face value' is True. Bonds are a form of financial instrument that serves as an 'I owe you' from the borrower to the investor. The face value is the principal amount of the bond that is repaid to the investor at maturity. At issuance, the bond is recorded at its face value on the balance sheet, regardless of the bond's present value, which can fluctuate based on the market interest rates.
The face value of a bond does not change over time; it's the agreed-upon amount that the borrower must pay back at the maturity date along with the last interest payment.
However, the market value of a bond, or present value, can differ from the face value due to changing market conditions affecting interest rates. This present value represents what a buyer is willing to pay for the bond at a given point in time. A bond's issuance records its face value because this is the actual liability the issuing entity has agreed to repay.