Reporting Issuance and Retirement of Long-Term Debt

On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Cash flows from financing activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:

ACCOUNT Bonds Payable

ACCOUNT NO.

Balance

Date

Item

Debit

Credit

Debit

Credit

Jan.

1

Balance

560,000

2

Retire bonds

112,000

448,000

June

30

Issue bonds

336,000

784,000

ACCOUNT Discount on Bond Payable									ACCOUNT NO.
									Balance
Date			Item		Debit		Credit		Debit		Credit
Jan.	1			Balance					25,200
	2			Retire bonds			8,960		16,240
June	30			Issue bonds	22,500				38,740
Dec.	31			Amortize discount			1,940		36,800

Items	Section of Statement of Cash Flows	Added or Deducted	Amount
Retire bonds	Financing activities	deducted
Issue bonds	Financing activities	added
Amortization of discount	Operating activities section, if indirect method used	added