Borrowers Who Retire Long-Term Liabilities Debit the Liability Account for Its

question 43

Multiple Choice

Borrowers who retire long-term liabilities debit the liability account for its current book value, credit Cash, and recognizes any difference on the retirement of the debt as a

• A)gain when book value exceeds cash disbursement (credit).
• B)gain when cash disbursement exceeds book value (credit).
• C)loss when book value exceeds cash disbursement (debit).
• D)a financing loss (debit).
• E)cannot be determined from the above information.

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