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Where are gains or losses from the extinguishment of debt recorded on the income statement?

The answer depends on the nature of operations and whether its usual or unusual for a company to engage in debt restructuring activities. As the visual below outlines, if the debt restructuring is considered normal course of business, then the gain or loss would be reported in continuing operations.

However, if the debt restructuring is unusual or out of the ordinary, then the gain or loss would be recorded as extraordinary, and should be included in the non-operating or non-recurring section of the income statement.

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