Accounting ASAP 2

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·        Gordon, E. A., Raedy, J. S., & Sannella, A. J. (2016). Intermediate accounting. Boston, MA: Pearson Education, Inc.

Make sure your response addressing the following questions is more than 200 words and you include an in-text citation, a quote from the pronouncement:

When are prepaid debit/credit cards liability extinguished? Read the Liabilities-Extinguishments of Liabilities article. On page three and four the parameters are stated when the liability is extinguished. If either of the following conditions is met:

•  The debtor pays the creditor and is relieved of its obligation for the liability. Paying the creditor includes the following:
• Delivery of cash.
• Delivery of other financial assets.
• Delivery of goods or services.
• Reacquisition by the debtor of its outstanding debt securities whether the securities are cancelled or held as so-called treasury bonds.
• The debtor is legally released from being the primary obligor under the liability, either judicially or by the creditor. For purposes of applying this Subtopic, a sale and related assumption effectively accomplish a legal release if nonrecourse debt (such as certain mortgage loans) is assumed by a third party in conjunction with the sale of an asset that serves as sole collateral for that debt.

Financial Liabilities

Read Chapters 13 and 14 in the textbook.

Write: Make sure your response addressing the following questions is more than 200 words and you include an in-text citation, a quote from the pronouncement.

When bonds are issued at other than par value, a discount or premium is recorded. This discount or premium is amortized over the life of the bond.  However, callable bond may be retired before the maturity date, which leaves a loss or gain to be recognized. Read the FASB Looks to Amend Income Recognition Rules Related to Callable Bonds article.