Bonds with a Face Value of $150,000 Are Issued at 98

question 12

Multiple Choice

Bonds with a face value of $150,000 are issued at 98. The statement of cash flows would report a:

• A)cash inflow of $147,000 in the investing activities section.
• B)cash inflow of $147,000 in the financing activities section.
• C)cash inflow of $3,000 in the investing activities section.
• D)cash inflow of $3,000 in the financing activities section.

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Definitions:

Ratify

To formally approve or confirm an agreement, treaty, or amendment, making it officially valid.

Misrepresentations

False statements or lies that are made with the intention of deceiving or misleading someone, often in a legal or contractual context.

Principal

The main party to a transaction, who has the primary responsibility, or in an agency relationship, the person for whom the agent acts.

Agent

A person authorized to act on behalf of another (known as the principal) in business transactions or other matters.