Question

Haven Corporation issued $700,000 of 10-year bonds payable at par in 2014. During 2020 Haven paid $50,000 interest and an additional $233,333 to retire one-third of the bonds at par. These activities would be reported in Haven's statement of cash flows for 2020 as:

Answer 1

Net cash used in financing activities $233,333

Cash disbursed for operating activities $50,000

Step-by-step explanation:

Based on the information given we were told that the company paid interest amount of $50,000 which as well include an additional amount of $233,333 to retire 1/3 of the bonds at par, which Therefore means that the above activities would be reported in Haven's statement of cash flows for 2020 as: NET CASH USED IN FINANCING ACTIVITIES of the amount of $233,333 and CASH DISBURSED FOR OPERATING ACTIVITIES of the amount of $50,000.