Early extinguishment of debt often produces a gain or a loss. How is the gain or loss determined?
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Early extinguishment of debt often produces a gain or a loss. How is the gain or loss determined?
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- In a debt extinguishment in which the debt is continued with modified terms and the carrying amount of the debt is more than the fair value of the debt A new effective-interest rate must be computed A loss should be recognized by the debtor. No interest expense should be recognized in the future. A gain should be recognized by the debtor.What are the general rules for measuring and recognizinggain or loss by both the debtor and the creditor in atroubled-debt restructuring involving a modification ofterms?If debt creates additional expense without enough benefit through codt savings, income or capital gain, them it is not worth it True or false?
- In the context of handling debt - like items in M&A, what is the most buyer-friendly approach for items representing a hard claim that must be paid post-close? a. Purchase price adjustments b. Escrow accounts c. Insurance policies d. Working capital adjustments e. Debt refinancingIs the debt primarily short-term or long-term? Why?When the effective rate falls due to good credit, the fair value of the bond payable reflects a higher amount, producing a loss. How is this loss accounted for?.
- If debt creates additional expense without enough benefit through cost savings, income or capital gain, then it is not worth it. True or False?Is the relevant cost of debt the interest rate on already outstanding debt or that on new debt? Why?Who is more likely to record a loss from debt restructuring? A. depends on the situation B.creditor C.both debtor and creditor D. debtor