Early extinguishment of debt often produces a gain or a loss. How is the gain or loss determined?

Q: Define the term Deferred Loan Repayments?

A: Answer: A deferred loan payment is nothing but a loan agreement in which the borrower may start…

Q: In your own opinion, what would be the out come or consequences if a debtor failed to settle thier…

A: A debt default occurs when the borrower is unable to pay the money back to the lender at the time…

Q: Explain how to account for the impairment of an available-for-sale debt investment.

A: Debt Investment:   A debt investment involves loaning out the money to an institution in exchange…

Q: What type of concessions might a creditor grant the debtor in a troubled-debt situation?

A: Debt is the amount owed by the company for a particular period from the date of the company's…

Q: What evidence is necessary to demonstrate the ability to defer settlement of short-term debt?

A: Short-term debt: Short-term debt refers to the current liability of an organization. This means that…

Q: Explain Collateralized debt obligations?

A: Collateralized debt obligations: A collateralized debt obligation (CDOs) is a portfolio of differing…

Q: What evidence is necessary to demonstrate the ability toconsummate the refinancing of short-term…

A:

Q: What is the distinction between debtor and creditor?

A: Accounts receivable Accounts receivable refers to the amounts to be received within a short period…

Q: Why What kind of stream of income does a debt security pay for the duration of the security? A fixed…

A: The Answer

Q: What is a bad debt

A: Solution:- Bad debt definition:- Companies sell products to customers on credit or cash basis. Bad…

Q: Define bad debt expense.

A: Definition:   Expenses: Expenses are costs incurred for the operations of a business. The costs…

Q: What are the differences between a debtor and a creditor?

A: Creditor: Creditor is a person or a company who has provided fund or loan, and hence, has a claim…

Q: The gain on early retire

A: Early retirement of bonds payable is where the bond holders are repaid before the maturity date.…

Q: A discounted note receivable is an example of a loss contingency? Is it true or false

A: This is a False.

Q: debt

A: Cost of debt can be defined as the rate of interest which a company incurs on its debts. The cost of…

Q: What are the instances when the debtor loses the benefit of the period? Explain by giving examples…

A: When a period for the performance or fulfillment of an obligation is agreed upon, it is believed to…

Q: difference between debt and quity

A: A company’s capital consists of two forms, one is equity and the other is debt. When a company is…

Q: explain the derecognition of debt;

A: Derecognition of debt As bonds are issued, then an entity may leave a bond that is outstanding till…

Q: When the effective rate falls due to good credit, the fair value of the bond payable reflects a…

A: The fixed income instrument which represents the loan granted by the investor to a borrower is known…

Q: Accounting The procedure that best reveals the existence of contingent debts is

A: Contingent liability is a liability that may or may happen on a future date that is based on an…

Q: When an irrecoverable debt recovered is not adjusted for: Mutple Choice Profits are overstated and…

A: Profit is overstated means the amount recorded is greater than the actual amount and current assets…

Q: A basic difference between loss contingencies and “real”liabilities is: a. Liabilities stem from…

A: Contingency is a liability that may arise in the future while the real liability has already…

Q: What are the general rules for measuring and recognizinggain or loss by both the debtor and the…

A: At the time when restructuring of a loan is taking place, the creditor must compute the loss…

Q: Explain the classification issues of short-term debt expected to be refinanced.

A: Short term debt: It refers to the financial obligation for the firm that needs to be paid within one…

Q: What types of short-term credit are classified as accrued liabilities?

A: An accrued liability means the expense of the business incurred during a specific period but has yet…

Q: Explain how to account for the impairment of held-to-maturity debt security.

A: Held to maturity securities are those securities which are purchased to be held till maturity…

Q: Why does the use of debt lower ROA?

A: Introduction: Debt can be characterised as an amount or sum owned by a person to another for…

Q: State the disadvantages of long-term debt financing.

A: Long term debt refers to the debt that has a maturity period of more than 1 year.They are also…

Q: What are the general rules for measuring gain or loss byboth creditor and debtor in a troubled-debt…

A: Rules for measuring gain or loss by creditor in a troubled-debt restructuring involving a…

Q: True or False: Borrowing and repaying debt principal does not impact net worth. Select one: True…

A: A company's net worth is the sum of its assets minus its liabilities as shown on its balance sheet.…

Q: Explain the nature of long term debt.

A: Nature of long-term debt: Long-term debts are the obligations of the company that are required to…

Q: What is the main purpose of loan loss provisioning? Explain the concepts of incurred loss model and…

A: The loan loss provision is the cash reserve created by the banks for the future credit risk. The…

Q: In a troubled-debt situation, why might the creditor grant concessions to the debtor?

A: Creditor: Creditor is a person or a company who has provided fund or loan, and hence, have a claim…

Q: In your own opinion what would be the outcome or consequences if a debtor failed to settle thier…

A: A debt default happens when the borrower fails to pay the money back to the lender at the time when…

Q: What is meant by Provision for Discount on Debtors and Reserve for Discount on Creditors.

A: Provision for discount on debtors: Discount is allowed for debtors when payment is made with in…

Q: What is the gain on extinguishment of the note payable?

A: option b is the answer.

Q: Explain Early Extinguishment of Debt.

A: Definition:   Liability: The claims creditors have over assets or resources of a company are…

Q: Should liability for rent deposit be amortized? Why or why not?

A: The assets are amortized as they provide benefits for the long period.

Q: What are out of period debts? Explain?

A: Out of Period debts: It is also known as time barred debts.

Q: What is proovision for bad debts

A: Bad debt means the amount due from debtor but it become bad i.e. it is not possible to recover the…

Q: Describe the accounting for the extinguishment of debt.

A: