Question

A company reported that its bonds with a par value of $40,000 and a carrying value of $52,000 are retired for $60,000 cash, resulting in a loss of $8,000. The amount to be reported under cash flows from financing activities is _____. $(8,000) $(60,000) $12,000 $40,000 $(52,000)

Answer 1

Answer: $(60,000)

Explanation:

From the question, we are told that a company reported that its bonds with a par value of $40,000 and a carrying value of $52,000 are retired for $60,000 cash, resulting in a loss of $8,000.

The amount to be reported under cash flows from financing activities will be $60,000. This is the amount from the question that the bonds are retired for.