When the sum of the future cash flows of a restructured note is above the current note's book value,the debtor recognizes
A)a gain on the debt restructure.
B)a loss on the debt restructure.
C)neither a gain nor a loss on the debt restructure.
D)both a restructure gain and an early extinguishment loss.

Question

Quizplus · Accepted Answer

When the sum of the future cash flows of a restructured note is above the current note's book value, the debtor does not recognize a gain or loss. Instead, the debtor adjusts the carrying amount of the note to the total future cash flows, and the difference is amortized over the life of the note.

When the Sum of the Future Cash Flows of a Restructured