Asked by
Rashmi Sangwan
on Oct 28, 2024
Verified
Which of the following statements is correct?
A) An outflow of cash for interest payments is reported as a cash flow from financing activities.
B) The conversion of bonds to stock is reported as a cash flow from financing activities.
C) An outflow of cash when callable bonds are recalled by the issuer is reported as a cash flow from financing activities.
D) Amortization of discounts and premiums on bonds payable are reported as a cash flow from financing activities.
Cash Flow
The total amount of money being transferred into and out of a business, especially as affecting liquidity.
Callable Bonds
Bonds that can be redeemed by the issuer prior to their maturity date, usually at a premium above the face value.
Financing Activities
Transactions involving changes in equity and long-term liabilities on the balance sheet, reflective of how a company raises capital and repays its investors.
- Comprehend the impact of journal entries on financial statements in relation to bond transactions.
Verified Answer
IO
Learning Objectives
- Comprehend the impact of journal entries on financial statements in relation to bond transactions.