Which items constitute cash flows from operating activities

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Question - For the Year ending 2018, company ZYX had a "Loan to ABC" beginning balance of $50; its own "Loan Payable" beginning balance of $50. And "Interest Receivable from ABC" of $20. Neither ABC nor ZYX are in the business of providing loans as their primary model.

Create the 2019 journal entries for the following items:

ABC company paid ZYX $20 in interest during 2018, as well as interest of $10 for 2019. Also, ABC paid $15 to reduce its loan's principal.

ZYX used the cash received from ABC to repay a portion of its loan, with $10 going to interest and the rest going to the principal.

Indicate which items constitute cash flows from operating activities, investing activities, and financing activities.

Reference no: EM133038872

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