Question
Nguyen Corporation issued a $9,600,000, 5 percent bond on August 1, year 1. The market interest rate was 6 percent on that date and the
Nguyen Corporation issued a $9,600,000, 5 percent bond on August 1, year 1. The market interest rate was 6 percent on that date and the bond matures in eight years. Interest on these bonds is payable annually on August 1. The company uses the effective-interest method and its fiscal year ends on November 30. Use Table 9C.1, Table 9C.2.
Required: How would the effect of the redemption transaction be reported on the statement of earnings and the statement of cash flows for the year ending November 30, year 2? The company uses the indirect method to prepare the operating section of the statement of cash flows. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) - options profit redemption on bond and loss on redemption of bond
NGUYEN CORPORATION Financial Statements As of year November 30, Year 2 Statement of Earnings: Non-operating activities Statement of Cash Flows: Operating activities Net earnings Add/Deduct items not affecting cash: Financing activities: Redemption of bond payable
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