How do i calculate this proble and enter it in a journal entry: On January 1, the long-term liability section of a company’s balance sheet showed a balance of $20,000 in the bonds payable account. On December 31, the balance in the same account was $35,000. The change would appear on the statement of cash flows as a inflow of cash of:
Please how do i calculate this problem and enter it in a journal entry: On January 1, the long-term liability section of a company’s balance sheet showed a balance of $20,000 in the bonds payable account. On December 31, the balance in the same account was $35,000. The change would appear on the statement of cash flows as a inflow of cash of:
To calculate the inflow of cash for the bonds payable account, we need to determine the change in the balance from January 1 to December 31.
Here's how you can calculate it:
1. Find the change in the balance: Subtract the January 1 balance from the December 31 balance.
Change in balance = December 31 balance - January 1 balance
Change in balance = $35,000 - $20,000
Change in balance = $15,000
2. Since the balance increased from $20,000 to $35,000, it means that the company received an inflow of cash.
Therefore, the inflow of cash for the bonds payable account would be $15,000.
When entering this information in a journal entry, you typically indicate the increase in cash as a credit (positive) entry. So, the journal entry would look something like this:
Date: December 31
Account Debit Credit
Bonds Payable $0 $15,000
Cash $15,000
Note: This assumes that there were no other transactions affecting the bonds payable account during the year. If there were additional inflows or outflows related to the bonds payable, they would need to be considered in the calculation.