Kier Company issued $580,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 4-year term to maturity. They had a 6.50% stated rate of interest that was payable in cash on December 31st. Based on this information alone, the amount of interest expense shown on the December 31, Year 1 income statement and the cash flow from operating activities shown on the December 31, Year 1 statement of cash flows would be:

	Interest Expense	Cash Outflow
A.	$37,700	zero
B.	zero	$37,700
C.	$37,700	$37,700
D.	zero	zero

Multiple Choice

• Choice A

• Choice D

• Choice C

• Choice B