On January 1, the long-term liability section of Cracker & Company Balance Sheet showed a balance of $800 million in long-term notes payable. On December 31, the balance in that same account was $120 million.

How should the company report the cash flow effect related to the change in this account on its Statement of Cash Flow?

1. As a cash outflow of $680 million in the financing section
2. As a cash outflow of $680 million in the investing section
3. As a cash outflow of $920 million in the financing section
4. As a cash outflow of $920 million in the investing section