If $350,000 of bonds are issued during the year but $140,000 of old bonds are retired during the year, the statement of cash flows will show a(n)
A) net increase in cash of $210,000.
B) net decrease in cash of $210,000.
C) increase in cash of $350,000 and a decrease in cash of $140,000.
D) net gain on retirement of bonds of $210,000.

Question

Quizplus · Accepted Answer

The statement of cash flows will show an increase in cash of $350,000 from the issuance of new bonds, and a decrease in cash of $140,000 from the retirement of old bonds. Therefore, the net effect on cash is an increase of $210,000.

If $350,000 of Bonds Are Issued During the Year but $140,000