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A corporation called an outstanding bond obligation four years before maturity. At that time there was an unamortized discount of $600,000. To extinguish this debt, the company had to pay a call premium of $200,000. Ignoring income tax considerations, how should these amounts be treated for accounting purposes?A) Charge $800,000 to a loss in the year of extinguishment.B) Either amortize $800,000 over four years or charge $800,000 to a loss immediately, whichever management selects.C) Charge $200,000 to a loss in the year of extinguishment and amortize $600,000 over four years.D) Amortize $800,000 over four years.
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