Question: At the beginning of the current year, two bond issues (X and Y) were outstanding. During the year, bond issue X was redeemed and a

At the beginning of the current year, two bond issues (X and Y) were outstanding. During the year, bond issue X was redeemed and a significant loss on the redemption of bonds was reported as an extraordinary item on the income statement. At the end of the year, bond issue Y was reported as a current liability because its maturity date was early in the following year. A sinking fund of cash and securities sufficient to pay the series Y bonds was reported in the balance sheet as Investments.
Identify the flaws in the reporting practices related to the two bond issues.

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