1-3-7 If $912000 of bonds are issued during the year but $1900000 of old bonds are...
1-3-7
If $912000 of bonds are issued during the year but $1900000 of old bonds are retired during the year, the statement of cash flows will show a(n)
|
net increase in cash of $988000. |
|
increase in cash of $912000 and a decrease in cash of $1900000. |
|
net decrease in cash of $912000. |
|
net loss on retirement of bonds of $988000. |
Homework Answers
Cash received from bond issue = $912,000
Cash paid to retire bonds = $1,900,000
Net decrease in cash = Cash received from bond issue - Cash paid to retire bonds
= 912,000 - 1,900,000
= - $988,000
Hence, options 1, 3 and 4 are incorrect.
The statement of cash flows will show an increase in cash of $912000 and a decrease in cash of $1900000.
Second option is correct.
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