Lincoln County retires a $50 million bond issue when the carrying value of the bonds is $48 million, but the market value of the bonds is $54 million. Lincoln County will record the retirement as a. A debit of $6 million to Loss due to early extinguishment.b. A credit of $6 million to Gain due to early extinguishment.c. No gain or loss on retirement.d. A debit to Cash for $54 million.
Lincoln County retires a $50 million bond issue when the carrying value of the bonds is $48 million, but the market value of the bonds is $54 million. Lincoln County will record the retirement as a. A debit of $6 million to Loss due to early extinguishment.b. A credit of $6 million to Gain due to early extinguishment.c. No gain or loss on retirement.d. A debit to Cash for $54 million.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lincoln County retires a $50 million bond issue when the carrying
a. A debit of $6 million to Loss due to early extinguishment.
b. A credit of $6 million to Gain due to early extinguishment.
c. No gain or loss on retirement.
d. A debit to Cash for $54 million.
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