What is the amount to be reported under cash flows from financing activities?
A web user asks, A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:
A. $ (3,000).
B. $(60,000).
C. $(57,000).
D. Zero. This is an operating activity.
E. Zero. This is an investing activity
Thank you.
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The actual amount paid out was $60,000 cash, so the answer is B. $(60,000). However you should note that the loss of $3,000 is to be added back to net income under the operating activities section.