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Which of the Following Statements Is Correct

Question 104
Multiple Choice

Which of the following statements is correct? A)An outflow of cash for interest payments is reported as a cash flow from financing activities. B)The conversion of bonds to stock is reported as a cash flow from financing activities. C)An outflow of cash when callable bonds are recalled by the issuer is reported as a cash flow from financing activities. D)Amortization of discounts and premiums on bonds payable are reported as a cash flow from financing activities.

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Q 105
Which of the following statements is incorrect? A)It is common for companies to retire bonds and also issue new bonds in the same year as a way to replace higher interest rate debt with lower interest rate issuances. B)The cash payment of interest is reported as a cash flow from operating activities. C)Retiring bonds by paying cash creates a cash flow from investing activities when the issuing company buys the bonds back from investors. D)The cash payment to call an outstanding bond issue is reported as a cash flow from financing activities.
Q 106
On March 1,2019,Halbur Company,issued $500,000 of 6%,five-year bonds at par.The bonds were dated March 1,2019,and the first annual interest payment will be on February 28,2020.The accounting period ends December 31.Assume no adjusting entries have been made during the year. Complete the journal entry grid for each of the following dates:
Q 107
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