The cost method presents no special complications. Interest-bearing debt securities that are purchased between interest dates are recorded at cost, which is market value on the date of acquisition. Accrued interest since the last interest payment date is recorded as interest interest is added to the cash paid because, at each interest date, the inter- est is paid to whomever holds the securities regardless of when they actually purchased debt securities are sold between interest dates, the seller collects accrued inter- est, which is recorded as interest revenue. When the debt securities are purchased, the accrued interest must be recorded separately from the cost of.
