Sold a building costing $35,000, with $22,000 of accumulated depreciation, for $10,000 cash, resulting in a $3,000 loss.

Acquired machinery worth $12,000 by issuing $12,000 in notes payable.

Issued 1,200 shares of common stock at par for $2 per share.

Long-term notes payable with a carrying value of $41,000 were retired for $49,000 cash, resulting in a $8,000 loss.

(a) Prepare the reconstructed journal entry. (b) Identify the effect it has, if any, on the investing section or financing section of the statement of cash flows.