When the required balance of the loss allowance decreases, a. the entity recognizes gain. b. the entity recognizes loss. c. the entity recognizes unearned interest to be amortized over the remaining term of the instrument. d. the entity recognizes a deferred charge to be amortized over the remaining term of the instrument.
When the required balance of the loss allowance decreases, a. the entity recognizes gain. b. the entity recognizes loss. c. the entity recognizes unearned interest to be amortized over the remaining term of the instrument. d. the entity recognizes a deferred charge to be amortized over the remaining term of the instrument.
Chapter12: Nonrecognition Transactions
Section: Chapter Questions
Problem 1DQ
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Question
When the required balance of the loss allowance decreases,
a. the entity recognizes gain.
b. the entity recognizes loss.
c. the entity recognizes unearned interest to be amortized over the remaining term of the
instrument.
d. the entity recognizes a deferred charge to be amortized over the remaining term of the
instrument.
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