Anders Inc,reported that its bonds with a par value of $500,000 and a carrying value of $525,000 was retired for $545,000 resulting in a loss of $20,000.The amounts to be reported under the cash flows include:
A) $45,000 net decrease in cash used for financing activities.
B) $525,000 net decrease in cash used for investing activities.
C) $20,000 increase in cash from operating activities;$545,000 decrease in cash used for investing activities.
D) $20,000 increase in cash from operating activities;$545,000 decrease in cash used for financing activities.

Question

Quizplus · Accepted Answer

The $20,000 loss is added back to net income in operating activities, and the $545,000 cash paid is reported as a decrease in cash under financing activities.

Anders Inc,reported That Its Bonds with a Par Value of $500,000