On the basis of the details of the following bonds payable and related discount accounts, indicate the items ACCOUNT Bonds Payable

On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:


ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Retire bonds
Issue bonds
1
2
30
Jan.
June
400,000
320,000
560,000
80,000
240,000
ACCOUNT Discount on Bond Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Retire bonds
Issue bonds
Amortize discount
1
2
30
31
Jan.
June
Dec.
18,000
11,600
27,600
26,200


Answer:

Cash flows from financing activities:
Cash received from issuing bonds payable………………………………………… $224,000
Less: Cash paid to redeem bonds payable……………………………………… 73,600
Note: The discount amortization of $1,400 would be shown as an adjusting item
(increase) in the Cash Flows from Operating Activities section under the indirect
method.