When a company purchases and retires its bonds,which of the following is the correct reporting on the statement of cash flows?
A)Gain or loss in operating section,amount of cash paid in investing section
B)Gain or loss in financing section,amount of cash received in operating section
C)Gain or loss in operating section,amount of cash paid in financing section
D)Gain or loss in investing section,amount of cash received in operating section

Question

Quizplus · Accepted Answer

When a company purchases and retires its bonds, any gain or loss is reported in the operating section of the statement of cash flows, since it is related to the company's normal operations. The amount of cash paid to retire the bonds is reported in the financing section, since it represents a use of cash for financing activities. Therefore, choice C is the correct answer.

When a Company Purchases and Retires Its Bonds,which of the Following