Answer: amortized cost.

## Explanation When a company purchases bonds with the intent to hold them until maturity, they are classified as **held-to-maturity (HTM) securities** under accounting standards (such as IFRS or US GAAP). **Key Accounting Treatment:** 1. **HTM securities** are measured at **amortized cost** on the balance sheet. 2. **Amortized cost** means the initial purchase price (including any premium or discount) is adjusted over time for the amortization of the premium or discount to maturity. 3. The premium (paying more than face value) is amortized over the remaining life of the bond, reducing the carrying amount gradually to the face value at maturity. **Why not the other options:** - **A. Fair value**: This applies to trading securities or available-for-sale securities, not HTM securities. - **B. Historical cost**: While the initial purchase is at historical cost, HTM securities are subsequently measured at amortized cost, which adjusts the historical cost for premium/discount amortization. **Conclusion:** Bonds purchased at a premium with the intent to hold until maturity are measured at **amortized cost** on the balance sheet.

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