Debt Retirement Flashcards
1
Q
Must Know:
A
- How is the bond measured
- What is the gain or loss on early extinguishment
2
Q
When is debt extinguished?
A
When the debtor pays the creditor the full amount of the debt or are relieved prior to the maturity
3
Q
When you perform an early retirement of debt, what are the steps you should follow:
A
1) Measure the interest up to the date of retirement and the amortization of premium or discount
2) Remove the deb t accounts including the unamortized premium or discount, and record a gain or loss
