The Dark Side of Debt-Free - For Dummies

The Dark Side of Debt-Free - For Dummies: "Finally, that wonderful day comes when the debt is paid off. You may not think of it as a thorny accounting situation — and it isn’t, as long as the debt is held to maturity. In other words, there’s no problem as long as the debtor doesn’t pay it off early.

However, if an event occurs that leads a company to pay off debt (whether a note or a bond) early, the company may have to figure gain or loss on the transaction. The regular amortization journal entries did not zero out any discount or premium on the debt payable."

'via Blog this'