Information pertaining to select activities of Extravaganza Inc. during 2019 is set out below:

1. Extravaganza converted $2,000,000 in bonds payable into 10,000 ordinary shares. At time of conversion, the book value of the bonds was $1,950,000; the contributed surplus—conversion option was $75,000; and the interest paid was $8,000. The interest had not previously been accrued.
2. During the year Extravaganza sold production equipment that originally cost $20,000 for $8,000. The net book value at time of sale was $5,000.
3. The opening balance in the land account was $200,000; the closing balance $225,000. During the year land costing $60,000 was given to a creditor in full settlement of a $70,000 loan. The fair value of the land at the time of the exchange was $70,000. The company also purchased a separate parcel of land for cash during the year.

Required:
a. Prepare the underlying journal entries to record the transactions.
b. For each entry identify the cash flow effects, if any, under both the direct and indirect methods of presentation and classify the cash flow according to its nature.