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Victor Company issued bonds with a $250,000 face value and a 6% stated rate of interest on January 1,2016.The bonds carried a 5-year term and sold for 95.Victor uses the straight-line method of amortization.Interest is payable on December 31 of each year.
-The amount of cash flow from operating activities on the December 31,2018 statement of cash flows would be:
A)$17,500.
B)$15,000.
C)$14,250.
D)$12,500.

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Victor Company issued bonds with a $250,000 face value and a 6% stated rate of interest on January 1,2016.The bonds carried a 5-year term and sold for 95.Victor uses the straight-line method of amortization.Interest is payable on December 31 of each year.
-The amount of cash flow from operating activities on the December 31,2018 statement of cash flows would be:
A)$17,500.
B)$15,000.
C)$14,250.
D)$12,500.

Quizplus · Accepted Answer

The cash flow from operating activities is the interest payment, which is 6% of the $250,000 face value, equaling $15,000 annually.

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