Question

The December 31, 2015, balance sheet of Contrail Air, Inc., showed long-term debt of $1,590,000, and the December 31, 2016, balance sheet showed long-term debt of $1,662,000. The 2016 income statement showed an interest expense of $103,900. What was the firm's cash flow to creditors during 2016?

Input area: Dec. 31, 2011 Long-term debt $ 1,590,000 Dec. 31, 2012 Long-term debt $ 1,662,000 Interest expense $ 103,900 Output area: Cash flow to creditors

Answer 1

Dec. 31, 2012 Long-term debt	1662000
(-) Dec. 31, 2011 Long-term debt	1590000
Net new borrowing	72000
Interest expense	103900
(-) Net new borrowing	72000
Cash flow to creditors	31900