Question

Kordel Company pays $15,200 relating to its installment note payable; of this amount $9,000 represents interest. In Kordel's statement of cash flows, this payment should be reported as (Select all that apply.)

a. Operating activities
b. Investing activities
c. Financing activities
d. Non-cash activities
e. Other comprehensive income

Answer 1

In Kordel Company's statement of cash flows, the payment of $15,200 relating to its installment note payable should be reported under financing activities.

Step-by-step explanation:

In Kordel Company's statement of cash flows, the payment of $15,200 relating to its installment note payable should be reported under financing activities. Financing activities involve transactions related to the company’s capital structure, such as obtaining or repaying loans and issuing or buying back shares.

In this case, the payment towards the installment note payable represents a repayment of debt, which falls under financing activities. It is not reported under operating activities because it is not directly related to the company's core operations.

Therefore, the correct answer is c. Financing activities.