Question
Most Solutions, Inc., issued 12% bonds, dated January 1, with a face amount of $760 million on January 1, 2018. The bonds mature in 2028
Most Solutions, Inc., issued 12% bonds, dated January 1, with a face amount of $760 million on January 1, 2018. The bonds mature in 2028 (10 years). For bonds of similar risk and maturity the market yield is 14%. 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) 672,824,960
Discount on bonds (difference) 87,175,040
Bonds payable (face amount) 760,000,000
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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