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The Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9%.The note was issued to the Galaxy Bank on August 1,2016.
-The amount of cash flow from financing activities on the December 31,2016 statement of cash flows would be:
A)$0.
B)$80,000 inflow.
C)$83,000 inflow.
D)($87,200)outflow.

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The Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9%.The note was issued to the Galaxy Bank on August 1,2016.
-The amount of cash flow from financing activities on the December 31,2016 statement of cash flows would be:
A)$0.
B)$80,000 inflow.
C)$83,000 inflow.
D)($87,200)outflow.

Quizplus · Accepted Answer

The cash flow from financing activities on the statement of cash flows includes any inflows or outflows of cash related to issuing or repaying debt. In this case, the Jackson Company issued a note payable for $80,000, so there would be an $80,000 inflow of cash from financing activities. The interest payments would be accounted for in the operating section of the cash flow statement.

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