A Company Reported That Its Bonds with a Par Value

question 123

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 outflow.
• B)$60,000 outflow.
• C)$57,000 outflow.
• D)Zero.This is an operating activity.
• E)Zero.This is an investing activity.

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Definitions:

Foreign Exchange Rates

The price of one country's currency in terms of another country's currency.

Economic Conditions

Refers to the current state of the economy, including factors like unemployment rates, inflation, and GDP growth.

Return on Total Assets

A profitability ratio measuring how efficiently a company uses its assets to generate profit.

Consolidated Financial Statements

Financial statements that integrate all assets, liabilities, equity, income, and expenses of a parent company and its subsidiaries, presenting the financial performance of the entire corporate group as a single entity.