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Jones Company issued bonds with a $200,000 face value on January 1,2016.The five-year term bonds were issued at 97 and had a 7 ½ % stated rate of interest that is payable in cash on December 31st of each year.Jones amortizes the bond discount using the straight-line method.Based on this information:
-The amount of cash outflow from operating activities shown on Jones's December 31,2017 statement of cash flows would be:
A)$15,000.
B)$16,200.
C)$13,800.
D)$17,400.

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Quizplus · Accepted Answer

The cash outflow from operating activities is the interest payment, which is 7.5% of the $200,000 face value, equaling $15,000 annually.

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