What amount should princeton report in cash flow

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Problem 1: On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. According to U.S. GAAP, what amount should Princeton report in cash flow from operating activities for the first year ended December 31, if the coupon payments are made on time?

A) ($90,000)

B) ($160,000)

C) ($168,300)

Problem 2: On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. According to U.S. GAAP, what amount should Princeton report in cash flow from financing activities at maturity?

A) ($1,800,000)

B) ($2,000,000)

C) ($2,080,000)

Reference no: EM132656269

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