Held-to-Maturity HTM Securities
Definition: Amortized cost; intent to hold
Scope:ModerateDifficulty:Moderate
Amortized cost; intent to hold
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Purchase bond at face value | ||
| Buy $25,000 face value bond. | ||
| HTM SecuritiesAsset+ | $25,000 | |
| CashAsset− | $25,000 | |
| Carried at amortized cost, not fair value. | ||
| 2. Receive semi-annual interest | ||
| 6% coupon, semi-annual: $25,000 × 3% = $750. | ||
| CashAsset+ | $750 | |
| Interest RevenueRevenue+ | $750 | |
| Interest income recognized when received. | ||
| 3. Collect at maturity | ||
| Bond matures; collect face value. | ||
| CashAsset+ | $25,000 | |
| HTM SecuritiesAsset− | $25,000 | |
| Investment fully recovered. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
HTM SecuritiesHTM SecuritiesAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$25,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$25,000.00
$0.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$750.00
$25,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$25,000.00
$750.00
Interest RevenueInterest RevenueRevenueIncome earned from business operations. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$750.00
Normal bal. ▶
$750.00
DurationLong-Term
External Links
- Held-to-maturity securities — Wikipedia