Gains or losses from the early extinguishment of debt, if material, should be:
A)recognized as an extraordinary item in the period of extinguishment.
B)amortized over the remaining original life of the extinguished issue.
C)amortized over the life of the new issue.
D)recognized in income as ordinary gains and losses or as unusual items.

Question

Quizplus · Accepted Answer

Gains or losses from the early extinguishment of debt are recognized in income as ordinary gains and losses or as unusual items, depending on their nature and frequency. They are not considered extraordinary items, nor are they typically amortized over the life of any debt issue.

Gains or Losses from the Early Extinguishment of Debt, If