Gains or losses from the early extinguishment of debt,if material,should be:

Question

Quizplus · Accepted Answer

Gains or losses from the early extinguishment of debt, if material, should be recognized in income as ordinary gains and losses or as unusual items. This is because such gains or losses arise from a typical business activity and are not considered to be exceptional events that would be classified as extraordinary items. Therefore, option A is the best choice. Option B is incorrect because it suggests that the gains or losses should be recognized as an extraordinary item, which is not the case. Option C and D are also incorrect because the gains or losses should not be amortized over the remaining original life of the extinguished issue or the life of the new issue, respectively.

Gains or Losses from the Early Extinguishment of Debt,if Material,should