A Company Reported That Its Bonds with a Par Value

question 85

Multiple Choice

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)$7,000.
• E)($7,000).

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a public marketplace.

Shares

Units of ownership interest or equity in a corporation or financial asset.

Retained Earnings

The portion of a company's profits that is held or retained for reinvestment in the business, rather than being paid out as dividends.

Common Stock

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.