Early extinguishment of debt
A)is not allowed by the FASB during the first 2 years bonds are outstanding
B)will never have related gains or losses recorded on the books.
C)occurs when the issuer redeems its own bonds by purchases on the open market or by exercising their rights to redeem callable bonds.
D)is not permitted.
E)is permitted only in the banking industry.

Question

Quizplus · Accepted Answer

Early extinguishment of debt occurs when the issuer redeems its own bonds by purchases on the open market or by exercising their rights to redeem callable bonds. Related gains or losses are recorded on the books. FASB does not prohibit early extinguishment of debt, and it is not limited to the banking industry.

Early Extinguishment of Debt