[jnm224]

Can someone explain to me why increases and decreases to unamortized bond discounts are related to operating activities?

Thanks.

Using: Becker, Wiley Test Bank, NINJA Notes, NINJA Audio

FAR - 90 (7/5)
REG - 90 (8/31)
BEC - 83 (10/13)
AUD - 97 (11/24)

[jnm224]

Never mind. I figured it out. The journal entry would be:

Dr. Interest expense

Cr. Bond discount

Cr. Cash

And interest expense is a component of operating activities when using the indirect method.

Using: Becker, Wiley Test Bank, NINJA Notes, NINJA Audio

FAR - 90 (7/5)
REG - 90 (8/31)
BEC - 83 (10/13)
AUD - 97 (11/24)

[Author]

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