The following information was drawn from Eckerd Company's 2014 and 2013 year-end balance sheets at the end of Year 2 and Year 1. $\begin{array}{|l|c|c|}
\hline & 2014&2013 \
\hline \text { Bonds payable} &\$ 170,000 & \$ 150,000 \
\hline
\end{array}$
$50,000 of Nnew bonds in the amount of $50,000 were issued at par during 2014Year 2.What is the amount of cash flow associated with the repayment of bond liabilities?
A) $120,000
B) $150,000
C) $30,000
D) Cannot be determined

Question

The following information was drawn from Eckerd Company's 2014 and 2013 year-end balance sheets at the end of Year 2 and Year 1. $\begin{array}{|l|c|c|}
\hline & 2014&2013 \
 \hline  \text { Bonds payable} &\$ 170,000 & \$  150,000 \
\hline 
\end{array}$
 $50,000 of Nnew bonds in the amount of $50,000 were issued at par during 2014Year 2.What is the amount of cash flow associated with the repayment of bond liabilities?
A) $120,000
B) $150,000
C) $30,000
D) Cannot be determined

Quizplus · Accepted Answer

The increase in bonds payable from $150,000 in 2013 to $170,000 in 2014 is $20,000. Since $50,000 of new bonds were issued, the repayment of bond liabilities must have been $50,000 - $20,000 = $30,000.

The Following Information Was Drawn from Eckerd Company's 2014 and 2013