Final answer:
The carrying value of bonds at maturity always equals the face value, as this is the predetermined amount the borrower agrees to pay back to the investor. Market value and book value only affect the bond during its life but not at the point of maturity. Option a.
Step-by-step explanation:
The carrying value of bonds at maturity always equals the face value of the bond. This is because the face value is the amount the borrower has committed to pay back to the investor when the bond matures, which also includes the last interest payment.
During the bond's life, its book value may fluctuate as it is amortized, and the market value will vary based on current interest rates and other market factors, however, at maturity, these do not affect the repayment amount, which is predetermined.
In essence, the movement of money through a bond involves saving in the present to finance current borrowing, but the present value of the capital provided by the investor is equal to the present value of the amount repaid at maturity.
Therefore, when bonds reach maturity, their carrying value reflects the original agreed-upon face value, irrespective of their market value at any previous time. Option a.