This year, Game Co. took advantage of market conditions to refund its outstanding debt. Game should report the excess of the carrying amount of the old debt over the amount paid to extinguish it as an)
A) deferred credit to be amortized over life of new debt.
B) part of continuing operations.
C) extraordinary item, net of income taxes.
D) prior period adjustment.

Question

Quizplus · Accepted Answer

The excess of the carrying amount of the old debt over the amount paid to extinguish it should be reported as part of continuing operations. This is because the extinguishment of debt is considered a part of the company's regular financial activities and not an extraordinary or unusual event.

This Year, Game Co