Bonds are very often issued between payment dates because the issuer requires the investor to pay the market price for the bonds plus accrued interest since the last interest date. At the next interest date, the corporation will return the accrues interest to the investor by paying the full amount of interest due on outstanding. Collection of accrued interest at the issuance date allows the company to pay a full period's interest to all bondholders at the nest interest payment date. The corporation as the issuer does not have to determine the individual amount of interest due each holder based on the time each bond had been outstanding.If bonds are not sold with accrues interest, the issuer would have to keep track of the purchaser and the date of purchase to ensure that each bondholder received the correct amount of interest. it is both simpler and less expensive for the issuer to sell the bonds with accrued interest.

The rationale for requiring an investor to pay accrued interest when a bond is purchased between interest payments dates is that a bond is constantly accruing interest. Between the payments dates the interest is constantly accruing until it is paid. This is the matching principle. When an investor purchases a bond in the middle of a payment period, the books must account for the time since the latest payment. The investor now owns the bond and must be responsible and pay any interest that has accrued. If the bond was purchases on the payment date, no interest had been accrued and therefore the investor does not pay any interest.

The rationale for requiring an investor to pay accrued interest when a bond is purchased between interest payments dates is that a bond is constantly accruing interest. Between the payments dates the interest is constantly accruing until it is paid. This is the matching principle. When an investor purchases a bond in the middle of a payment period, the books must account for the time since the latest payment. The investor now owns the bond and must be responsible and pay any interest that has accrued. If the bond was purchases on the payment date, no interest had been accrued and therefore the investor does not pay any interest.