If there is a loss on bonds redeemed before maturity, it is
A) debited directly to Retained Earnings.
B) reported as "Other Expenses" on the income statement.
C) reported as a reduction in interest revenue on the income statement.
D) debited to Interest Expense, as a cost of financing.

Question

Quizplus · Accepted Answer

When bonds are redeemed before maturity and a loss occurs, it is typically reported as "Other Expenses" on the income statement. This treatment reflects the loss as a non-operating expense, separate from regular interest expenses or revenue adjustments.

If There Is a Loss on Bonds Redeemed Before Maturity