Aiken Corporation acquired a land site with a building by issuing a 30-year mortgage payable.In Aiken's statement of cash flows,this transaction should be shown
A) only as a cash flow from operating activity for the purchase of the land and building.
B) only as a cash flow from financing activity for the issuance of the mortgage payable.
C) in the schedule of noncash investing and financing transactions.
D) as both a cash flow from investing activity and a cash flow from financing activity.

Question

Quizplus · Accepted Answer

This transaction involves no actual cash flow, as the land and building were acquired by issuing a mortgage payable. It should be reported in the schedule of noncash investing and financing transactions.

Aiken Corporation Acquired a Land Site with a Building by Issuing