Question
1. Which of the following statements is true with regard to early retirement of bonds? a. If the carrying value of the bonds is higher
1. Which of the following statements is true with regard to early retirement of bonds?
a. If the carrying value of the bonds is higher than the redemption price, the issuing firm must record a loss.
b. Firms always find it advantageous to retire bonds issued at lower rates with bonds issued at higher rates.
c. It is always advantageous to carry out early retirement for bonds issued at a premium but not for bonds issued at a discount.
d. Any gain or loss resulting from early retirement of bonds would appear on the income statement of the issuing company.
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