Question

At the beginning of the year, Nothing More, Corp., had a long-term debt balance of $36,554. During the year, the company repaid a long-term loan in the amount of $8,914. The company paid $3,190 in interest during the year, and opened a new long-term loan for $7,930. What was the cash flow to creditors during the year?

Answer 1

Answer:

$4,174

Explanation:

The computation of the cash flow to creditors is shown below:

= Interest expense paid - Addition contributed to a long term loan + Long term loan repaid

= $3,190 - $7,930 + $ 8,914

= $4,174

We simply deduct the additions contributed to a long term and added the long term loan repaid to the interest expense paid