Sonesta Company owed one of its creditors $250 000 but did not have enough cash to repay the debt.Following lengthy negotiations,the parties agreed that Sonesta would issue 100 000 ordinary shares to settle the debt.This transaction would be reported in the financing section of the cash flow statement.

Question

Quizplus · Accepted Answer

This transaction would be reported in the investing section of the cash flow statement as it involves the issuance of shares, which is an investing activity, not a financing activity.

Sonesta Company Owed One of Its Creditors $250 000 but Did