If there is a loss on bonds redeemed early, it is
A) debited directly to Retained Earnings.
B) reported as "Other Expense" on the statement of earnings.
C) reported as part of earnings from operations on the statement of earnings.
D) debited to Interest Expense, as a cost of financing.

Question

Quizplus · Accepted Answer

When bonds are redeemed early and a loss occurs, it is typically reported as "Other Expense" on the income statement. This treatment separates the loss from operating expenses and interest expenses, providing a clearer view of the company's operational performance and financing costs.

If There Is a Loss on Bonds Redeemed Early, It