Explain the early extinguishment of debt


Jarvis, Inc reported net income of $340000 for the year ended December 31,2011. Included in net income was a gain on early extinguishment of debt of $60,000 related to bonds payable with a book value of $1,200,000. Each of the following accounts increased during 2011:

  • Notes Receivables $45,000
  • Deferred Tax Liability $10,000
  • Treasury Stock $90,000

What is the amount of cash used by financing activities for Jarvis, Inc. for the year ended December 31,2011

a) $1,240,000
b) $1,230,000
c) $160,000
d) $195,000

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Accounting Basics: Explain the early extinguishment of debt
Reference No:- TGS0707738

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