When Bonds Are Retired Prior to Maturity with Proceeds from a New

question 52

Multiple Choice

When bonds are retired prior to maturity with proceeds from a new bond issue,gain or loss from the early extinguishment of debt,if material,should be

• A) amortized over the remaining original life of the retired bond issue.
• B) recognized in income from continuing operations in the period of extinguishment.
• C) recognized as an extraordinary item in the period of extinguishment.
• D) amortized over the life of the new bond issue.

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Definitions:

Treble Damages

A legal award in a lawsuit that triples the amount of actual or compensatory damages, often granted in cases of willful wrongdoing.

Geographic Markets

Areas delineated by geographical boundaries within which a population might reasonably constitute a market for goods or services, often considered in economic and marketing analyses.

Monopoly

A market structure in which a single seller controls all production and sale of a particular product or service.

Sherman Act

A landmark federal statute in the field of United States antitrust law prohibiting monopolistic behaviors.