Reporting Issuance and Retirement of Long-Term DebtOn the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:ACCOUNT Bonds PayableACCOUNT NO. BalanceDateItemDebitCreditDebitCreditJan.1 Balance 300,000 2 Retire bonds60,000 240,000 June30 Issue bonds 180,000 420,000 ACCOUNT Discount on Bonds PayableACCOUNT NO. BalanceDateItemDebitCreditDebitCreditJan.1 Balance 13,500 2 Retire bonds 4,800 8,700 June30 Issue bonds12,100 20,800 Dec.31 Amortize discount 1,040 19,760 ItemSection of Statement of Cash FlowsAdded or DeductedAmountRetire bonds $fill in the blank 3Issue bonds $fill in the blank 6Amortization of discount $fill in the blank 9

Financing activities section of a cash flows statement are activities recorded in it which directly…

Answered: On the basis of the details of the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 14E

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Reporting Issuance and Retirement of Long-Term Debt

On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:

ACCOUNT Bonds Payable

ACCOUNT NO.

Balance

Date

Item

Debit

Credit

Debit

Credit

Jan.

Balance

300,000

Retire bonds

60,000

240,000

June

Issue bonds

180,000

420,000

ACCOUNT Discount on Bonds Payable	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
Jan.	1			Balance			13,500
	2			Retire bonds			4,800		8,700
June	30			Issue bonds	12,100				20,800
Dec.	31			Amortize discount		1,040		19,760

Item	Section of Statement of Cash Flows	Added or Deducted	Amount
Retire bonds			$fill in the blank 3
Issue bonds			$fill in the blank 6
Amortization of discount			$fill in the blank 9

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