Presented Below Is a Partial Amortization Schedule for Discount Foods

question 79

Essay

Presented below is a partial amortization schedule for Discount Foods: $$\begin{array} { c c c c c } ( 1 ) & ( 2 ) & ( 3 ) & ( 4 ) & ( \mathbf { 5 } ) \\\text { Period } & \text { Cash } & \begin{array} { c } \text { Interest } \\\text { Paid }\end{array} & \begin{array} { c } \text { Increase in } \\\text { Carpense }\end{array} & \begin{array} { c } \text { Carrying } \\\text { Value }\end{array} \\\text { Issue date } & & & & \$ 74,564 \\1 & \$ 2,800 & \$ 2,983 & \$ 183 & 74,747 \\2 & 2,800 & 2,990 & 190 & 74,937\end{array}$$ 1. Record the bond issue.
2. Record the first interest payment.

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking down the analysis to operating, investing, and financing activities.

Operating Activities

Activities directly related to the primary operations of a business, including production, sales, and distribution, which are reflected in its cash flow.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet items to arrive at cash flow from operating activities.

Cash Dividends

Payments made by a company out of its profits to its shareholders in the form of cash.