Question
Most Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $690 million on January 1, 2018. The bonds mature in 2028
Most Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $690 million on January 1, 2018. The bonds mature in 2028 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest expense is recorded at the effective interest rate. Interest is paid semiannually on June 30 and December 31. Most recorded the sale as follows:
January 1, 2018 | ||
Cash (price) | 610,854,240 | |
Discount on bonds (difference) | 79,145,760 | |
Bonds payable (face amount) | 690,000,000 | |
Required: What would be the amount(s) related to the bonds that Most Solutions would report in its statement of cash flows for the year ended December 31, 2018? (List any cash outflow with a minus sign. Enter your answers in whole dollars.)
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