When debt is extinguished before its maturity date, any difference between the reacquisi-tion price of outstanding debt and its net carrying amount per books should be
A) amortized over the remaining original life of the extinguished issue.
B) amortized over the life of the new issue.
C) recognized currently in income as a loss or gain.
D) treated as a prior period adjustment.

Question

Quizplus · Accepted Answer

The difference between the reacquisition price of the debt and its net carrying amount should be recognized currently in income as a loss or gain, reflecting the immediate financial impact of the extinguishment.

When Debt Is Extinguished Before Its Maturity Date, Any Difference