bond premiums and discounts on the cash flow statement the company has bonds outstan 692420
Bond Premiums and Discounts on the Cash Flow Statement
The company has bonds outstanding with a face value of $50,000 and an unamortized premium of $2,350 at the beginning of the year and $2,000 as of the end of the year. Sales (all for cash) were $42,000 for the year. Total interest expense of $4,650 was reported for the year. Because interest expense is the only expense for this company, net income for the year was $37,350 ($42,000 $4,650). Prepare the Operating Activities section of the cash flow statement using both (1) the direct method and (2) the indirect method.